BANCROFT 
LIBRARY 

•0- 

THE  LIBRARY 

OF 

THE  UNIVERSITY 
OF  CALIFORNIA 


Proceedings  of  the 

First  Pan  American  Financial 

Conference 


CONVENED  BY  AUTHORITY  OF  THE 
CONGRESS  OF  THE  UNITED  STATES 

UNDER  THE  DIRECTION  OF 


HON.  WILLIAM  G.  McADOO 

Secretary  of   the   Treasury 


Washington 
May  24  to  29,  1915 


WASHINGTON 

GOVERNMENT  PRINTING  OFFICE 
1915 


7YW 

BANCROFT 
LIBRARY 


TABLE  OF  CONTENTS. 


Page. 

I.  Letter  to  the  President  of  the  United  States  from  the  Secretary  of 
the  Treasury,  transmitting  the  proceedings  of  the  Pan  American 

Financial  Conference 5 

II.  Report  of  the  Secretary  General  of  the  Pan  American  Financial 

Conference  to  the  Secretary  of  the  Treasury 21 

III.  Program  of  the  Conference  and  list  of  questions  submitted  by  the 

Secretary  of  the  Treasury  for  consideration  of  the  Conference 35 

IV.  Proceedings  of  the  General  Sessions  of  the  Pan  American  Financial 

Conference 83 

Opening  session — Monday  morning,  May  24,  1915 85 

Second  session — Monday  afternoon,  May  24,  1915 111 

Third  session — Tuesday  morning,  May  25,  1915 145 

Fourth  session — Thursday  morning,  May  27,  1915 191 

Fifth  session — Friday  afternoon,  May  28,  1915 229 

Sixth  session — Saturday  morning,  May  29,  1915 247 

Seventh  session — Saturday  afternoon,  May  29,  1915 269 

V.  Reports  of  General  Committees 297 

VI.  Reports  of  Group  Committees 311 

VII.  Addresses  and  responses  made  at  banquet  tendered  to  the  delegates 
to  the  Pan  American  Financial  Conference  by  the  Secretary  of 

the  Treasury r 469 

VIII.  Notes  on  the  trip  of  the  delegates  at  the  conclusion  of  the  Con- 
ference   . 491 

IX.  Cablegram  sent  by  the  President  of  the  United  States  to  the  Presi- 
dents of  the  Latin  American  countries  represented  at  the  Con- 
ference and  replies  thereto 505 

X.  Letter  from  the  Secretary  of  the  Treasury  to  the  delegates  regard- 
ing the  future  of  the  work  initiated  by  the  Conference 515 

XI.  Permanent  committee  appointments  made  by  the  Secretary  of  the 

Treasury    525 

United  States  members  of  the  International  High  Commission. 
Committee  on  Return  Visit. 

United  States  members  of  Permanent  Group  Committees. 
XII.  Memoranda    on    financial    and    commercial    conditions    in    Latin 

America  submitted  to  the  Conference 533 

3 


LETTER  TO  THE  PRESIDENT  OF 
THE  UNITED  STATES  FROM  THE 
SECRETARY  OF  THE  TREASURY 
TRANSMITTING  THE  PROCEED- 
INGS OF  THE  PAN  AMERICAN 
FINANCIAL  CONFERENCE 


LETTER  TO  THE  PRESIDENT  OF  THE  UNITED  STATES  FROM  THE 
SECRETARY  OF  THE  TREASURY  TRANSMITTING  THE  PROCEED- 
INGS OF  THE  PAN  AMERICAN  FINANCIAL  CONFERENCE. 


TREASURY  DEPARTMENT, 

Washington,  September  6,  1915. 

SIR:  The  diplomatic  and  consular  appropriations  bill  approved 
March  4,  1915,  contained  the  following  provision : 

"The  President  is  hereby  authorized  to  extend  to  the 
Governments  of  Central  and  South  America  an  invitation 
to  be  represented  by  their  ministers  of  finance  and  leading 
bankers,  not  exceeding  three  in  number  in  each  case,  to  at- 
tend a  conference  with  the  Secretary  of  the  Treasury  in  the 
city  of  Washington,  at  such  date  as  shall  be  determined  by 
the  President,  with  a  view  to  establishing  closer  and  more 
satisfactory  financial  relations  between  their  countries  and 
the  United  States  of  America,  and  authority  is  hereby  given 
to  the  Secretary  of  the  Treasury  to  invite,  in  his  discretion, 
representative  bankers  of  the  United  States  to  participate  in 
the  said  conference,  and  for  the  purpose  of  meeting  such 
actual  and  necessary  expenses  as  may  be  incidental  to  the 
meeting  of  said  conference  and  for  the  entertainment  of  the 
foreign  conferees  the  sum  of  $50,000  is  hereby  appropriated, 
out  of  any  money  in  the  Treasury  not  otherwise  appropri- 
ated, to  be  expended  under  the  direction  of  the  Secretary  of 
the  Treasury." 

In  pursuance  thereof  the  Secretary  of  State  extended  in  your  be- 
half an  invitation  to  the  various  South  and  Central  American  Ke- 
publics  to  attend  a  conference  with  the  Secretary  of  the  Treasury  in 
the  city  of  Washington  on  the  24th  day  of  May,  1915.  This  invita- 
tion was  cordially  received  and  accepted  by  all  of  the  Governments 
concerned.  Following  is  a  list  of  the  Governments  represented,  with 
the  names  of  the  delegates  appointed  by  them  to  attend  the  con- 
ference : 

7 


8 


PAN  AMERICAN   FINANCIAL  CONFERENCE. 


ARGENTINA  :* 

Senor  Dr.  Samuel  Hale  Pearson. 

Sefior  Dr.  Ricardo  C.  Aldao. 

Sefior  Dr.  V.  Villamil. 
BOLIVIA  : 

Senor  Dr.  Ignacio  Calderon. 

Senor  Dr.  Adolfo  Ballivian. 
BRAZIL: 

Senhor  Dr.  Amaro  Cavalcanti. 
CHILE: 

Senor  Dr.  Luis  Izquierdo. 

Sefior  Dr.  Augusto  Villanueva. 

Senor  Dr.  Gonzalo  Vergara  Bulnes. 
COLOMBIA  : 

Senor  Dr.  Santiago  P6rez  Triana. 

Senor  Dr.  Roberto  Ancizar. 
COSTA  RICA  : 

Senor      Dr.      Mariano      Guardia 
Carazo. 

Senor  Dr.  John  M.  Keith. 
CUBA: 

Sefior    Dr.    Pablo    Desvernine   y 
Gald6s. 

Senor  Dr.   Porfirio  Franca  y  Al- 
varez de  la  Campa. 

Sefior  Dr.  Octavio  Zayas  y  Adan. 
DOMINICAN  REPUBLIC: 

Senor  Dr.  Francisco  J.  Peynado. 

Sefior  Dr.  Enrique  Jimenez. 
ECUADOR : 

Sefior  Dr.  Juan  Cueva  Garcia. 

Sefior  Dr.  Vicente  Gonzales  B. 

Sefior  Dr.  Enrique  Gallardo. 

The  Secretary  of  the  Treasury  was  authorized  to  invite,  in  his 
discretion,  representative  bankers  of  the  United  States  to  participate 
in  said  conference.  In  the  exercise  of  that  discretion  I  extended 
invitations  to  a  representative  body  of  our  bankers  and  business  men. 
A  list  of  them  will  be  found  on  page  44  of  the  proceedings  of  the 
conference. 

The  members  of  the  diplomatic  corps  of  the  Latin  American 
Republics,  the  members  of  the  Cabinet  of  the  United  States,  the 
chairman  of  the  Committee  on  Foreign  Relations  of  the  Senate  (Hon. 
William  J.  Stone),  the  chairman  of  the  Committee  on  Foreign  Af- 
fairs of  the  House  of  Representatives  (Hon.  Henry  D.  Flood),  the 
Assistant  Secretaries  of  the  Treasury,  the  members  of  the  Federal 
Reserve  Board,  the  members  of  the  Federal  Trade  Commission,  and 
the  chairmen  of  the  boards  of  directors  and  the  governors  of  each  of 
the  Federal  reserve  banks  were  also  invited. 


GUATEMALA  : 

Sefior  Dr.  Victor  Sanchez  Ocaiia. 

Sefior  Dr.  Carlos  Herrera. 

Sefior  Dr.  Juan  S.  Lara. 
HONDURAS  : 

Sefior  Dr.  Leopoldo  C6rdova. 

Sefior  Dr.  Daniel  Fortin. 
NICARAGUA  : 

Sefior  Dr.  Pedro  Rafael  Cuadra. 

Sefior  Dr.  Albert  Strauss. 

Sefior  Dr.  Clifford  D.  Ham. 
PANAMA : 

Sefior  Dr.  Aristides  Arjona. 

Sefior  Dr.  Ramon  F.  Acevedo. 

Senor  Dr.  Ramon  Arias,  jr. 
PARAGUAY : 

Sefior  Dr.  Hector  Velazquez. 

Sefior    Dr.     William     Wallace 

White. 
PERU: 

Sefior  Dr.  Isaac  Alzamora. 

Senor  Dr.  Eduardo  Higginson. 
SALVADOR : 

Senor  Dr.  Alfonso  Quifi6nez  M. 

Sefior  Dr.  Jose"  E.  Suay. 

Sefior  Dr.  Roberto  Aguilar. 
URUGUAY : 

Sefior  Dr.  Pedro  Cosio. 

Senor  Dr.  Gabriel  Terra. 

Sefior  Dr.  Carlos  Marfa  de  Pena. 
VENEZUELA  : 

Sefior  Dr.  Pedro  Rafael  Rincones. 


*  Dr.  Villamil  and  Mr.   John  E.  Zlmmermann  attended  the  conference  as  representa- 
tives of  the  Buenos  Aires  Chamber  of  Commerce. 


LETTER  FROM  THE  SECRETARY  OF  THE  TREASURY.        9 

Through  the  courtesy  of  the  Governing  Board  of  the  Pan  Ameri- 
can Union  the  Conference  was  held  in  the  Pan  American  Building 
in  the  city  of  Washington.  The  first  session  began  at  10  o'clock  a.  m., 
Monday,  the  24th  of  May,  1915.  The  Secretary  of  the  Treasury  pre- 
sided, and  the  proceedings  were  opened  with  addresses  by  the  Presi- 
dent and  Secretary  of  State  of  the  United  States,  to  which  responses 
were  made  by  representatives  of  the  visiting  Governments.  The 
sessions  continued  until  the  29th  of  May,  1915. 

A  full  report  of  the  proceedings  is  submitted  herewith.  I  shall  not 
attempt  to  review  these  proceedings;  I  shall  merely  summarize  the 
most  important  results. 

There  was  unanimous  opinion  that  two  things  are  essential  to  the 
development  of  trade  and  improved  relations  between  the  Latin- 
American  nations  and  the  United  States,  viz : 

1.  The  granting  by  United  States  bankers  and  business 
men  of  ample  credits  to  Latin  America  and  the  prompt  pro- 
vision of  the  necessary  organization  and  facilities  for  this 
purpose. 

2.  The  prompt  establishment  of  adequate  steamship  fa- 
cilities between  the  leading  ports  of  the  United  States  and 
South  America,  which  the  Conference,  by  resolution,  de- 
clared "  a  vital  and  imperative  necessity." 

As  to  the  first  of  these  necessities,  viz,  credits :  Central  and  South 
America  have,  heretofore,  relied  almost  wholly  on  Europe  for  their 
financial  requirements.  The  great  war  has  seriously  disturbed  and 
injured  those  countries  by  the  sudden  derangement  and  withdrawal 
of  European  credits.  United  States  credits  must  be  substituted 
if  the  orderly  development  and  progress  of  Latin  America  is  to  con- 
tinue, and  if  we  desire  to  enlarge  the  trade  and  financial  influence 
of  the  United  States  in  those  countries. 

Manifestly  enlightened  interest  in  the  welfare  of  our  friendly 
neighbors  should  induce  us  to  extend  to  them  every  facility  that  our 
resources  will  permit.  Such  a  policy  will  inure  to  their  and  our 
advantage. 

It  is  nothing  short  of  providential  that  the  Federal  Reserve  system 
has  been  established.  Happily  it  offers  the  means  by  which  the  great 
objects  in  view  can  be  largely,  if  not  wholly,  attained.  The  Federal 
Reserve  Act  has  so  consolidated  and  organized  our  credit  resources 
that  our  bankers  are,  for  the  first  time  in  our  history,  able  to  engage  in 
world-wide  financial  operations.  We  now  have  the  available  re- 
sources. It  is  merely  a  question  of  their  intelligent  use. 

The  first  step  should  be  the  establishment  of  the  necessary  branches 
or  agencies  in  the  leading  cities  of  all  of  the  countries  of  South  and 


10  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

Central  America  by  a  bank  or  banks  having  the  necessary  resources 
to  take  the  business  that  is  open  to  them.  One  of  our  largest  banks 
has  had  the  enterprise  to  establish  branches  in  some  of  the  largest 
cities  in  South  America,  but  manifestly  the  resources  of  a  single  bank 
or  of  several  of  our  largest  banks  are  insufficient  to  meet  the  demands 
of  the  situation  as  it  now  exists  and  as  it  will  develop  in  the  future. 
What  is  needed  is  the  use  of  the  consolidated  banking  power  of  the 
United  States  applied  through  agencies  established  in  the  leading 
cities  of  Latin  America. 

The  Federal  Reserve  Act  has  supplied  the  necessary  authority,  and 
it  only  remains  for  the  Federal  Reserve  banks,  with  the  approval  of 
the  Federal  Reserve  Board,  to  make  practical  use  of  that  power.  Sec- 
tion 14  (paragraph  e)  of  said  act  gives  every  Federal  Reserve  bank 
the  right — 

"  To  establish  accounts  with  other  Federal  Reserve  banks 
for  exchange  purposes  and,  with  the  consent  of  the  Federal 
Reserve  Board,  to  open  and  maintain  banking  accounts  in 
foreign  countries,  appoint  correspondents,  and  establish 
agencies  in  such  countries  wheresoever  it  may  deem  best  for 
the  purpose  of  purchasing,  selling,  and  collecting  bills  of 
exchange,  and  to  buy  and  sell  with  or  without  its  indorse- 
ment, through  such  correspondents  or  agencies,  bills  of  ex- 
change arising  out  of  actual  commercial  transactions  which 
have  not  more  than  ninety  days  to  run  and  which  bear  the 
signature  of  two  or  more  responsible  parties." 

In  addition  to  these  powers,  the  Federal  Reserve  banks  may,  "  under 
rules  and  regulations  prescribed  by  the  Federal  Reserve  Board,  pur- 
chase and  sell  in  the  open  market,  at  home  or  abroad,  either  from  or 
to  domestic  or  foreign  banks,  firms,  corporations,  or  individuals, 
cable  transfers  and  bankers'  acceptances  and  bills  of  exchange  of 
the  kinds  and  maturities  by  this  act  made  eligible  for  rediscount  with 
or  without  the  indorsement  of  a  member  bank,"  and  may  "deal  in 
gold  coin  and  bullion  at  home  or  abroad,  make  loans  thereon,"  etc., 
and  "  buy  and  sell,  at  home  or  abroad,  bonds  and  notes  of  the  United 
States,"  etc.  Enlargement  of  these  powers  would  be  desirable  to 
increase  the  usefulness  of  foreign  agencies  of  Federal  Reserve  banks 
and  it  is  probable  that  the  Congress  would  grant  such  enlarged 
powers  upon  good  cause  shown. 

The  twelve  Federal  reserve  banks  could,  with  the  consent  of  the 
Federal  Reserve  Board,  establish  joint  agencies  in  each  of  the  coun- 
tries of  Latin  America,  their  interest  in  such  agencies  to  be  in  propor- 
tion to  the  capital  stock  and  surplus  of  each  participating  Federal 
Reserve  bank.  The  combined  capital  stock  and  resources  of  our  Fed- 
eral Reserve  banks,  utilized  in  this  way  for  the  extension  and  pro- 
motion of  our  foreign  commerce,  would  give  them  unrivaled  financial 
power.  They  could  maintain  themselves  in  foreign  fields  in  competi- 


LETTER  FROM  THE  SECRETARY  OF  THE  TREASURY.       11 

tion  with  the  world  and  perform  a  service  of  incalculable  value  to 
the  American  people. 

During  the  Pan  American  Financial  Conference  the  suggestion 
was  made  by  some  of  our  leading  bankers  that  the  national-bank  act 
might  be  amended  so  as  to  permit  a  number  of  the  national  banks 
to  become  stockholders  in  an  independent  bank  organized  for  the 
purpose  of  doing  business  in  foreign  countries.  This  plan,  even  if 
it  were  not  open  to  objection,  would  be  manifestly  inferior  to  the 
agency  of  the  combined  Federal  Eeserve  banks.  The  Federal  Reserve 
banks  comprise  in  their  membership  every  national  bank  in  the 
United  States,  as  well  as  a  number  of  our  leading  State  banks  and 
trust  companies.  They  constitute  a  financial  organization  of  un- 
equaled  strength,  and  their  operations  in  foreign  countries  will  be 
for  the  common  benefit  of  all  of  the  national  banks,  State  banks,  and 
trust  companies  composing  the  Federal  Reserve  system.  These  agen- 
cies in  foreign  countries  could,  in  addition  to  their  banking  business, 
render  a  great  service  to  American  business  men  and  bankers  by 
furnishing  credit  reports  and  general  information  about  trade  and 
finance  in  the  various  countries  in  which  they  operate. 

The  power  of  the  Federal  Reserve  banks  to  establish  such  joint 
agencies  in  foreign  countries,  with  the  consent  of  the  Federal  Reserve 
Board,  appears  to  be  beyond  question.  The  initiative  rests  with  the 
Federal  reserve  banks.  While  they  can  not  be  compelled  to  estab- 
lish such  agencies,  I  believe  that  upon  a  careful  study  of  the  situa- 
tion and  with  the  encouragement  of  the  Federal  Reserve  Board 
they  will  be  prompted  to  take  this  important  step. 

The  establishment  of  Federal  Reserve  agencies  will  not  prevent  the 
member  banks  from  carrying  on  and  enlarging  the  business  they  are 
now  doing  in  foreign  countries.  It  is  gratifying  to  note  that  many 
of  our  national  banks  and  trust  companies  are  showing  commendable 
enterprise  in  supplying  credits  to  Latin  America. 

As  to  the  second  necessity,  namely,  the  establishment  of  adequate 
steamship  facilities:  The  Pan  American  Financial  Conference,  by 
unanimous  vote,  adopted  the  following  resolution : 

"  Resolved,  That  it  is  the  sense  of  this  Conference  that  im- 
proved ocean  transportation  facilities  between  the  countries 
composing  the  Pan  American  Union  have  become  a  vital 
and  imperative  necessity,  and  that  every  effort  should  be 
made  to  secure,  at  the  earliest  possible  moment,  such  im- 
proved means  of  ocean  transportation,  since  it  is  of  primary 
importance  to  the  extension  of  trade  and  commerce  and  im- 
proved financial  relations  between  the  American  Republics." 

The  Committee  on  Transportation  filed  a  report  recommending, 
among  other  things,  that  the  Secretary  of  the  Treasury  of  the  United 
States,  as  chairman  of  the  Conference,  appoint  a  permanent  com- 


12  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

mittee,  to  be  composed  of  representatives  of  the  United  States  and 
Argentina,  Brazil,  Uruguay,  Chile,  Ecuador,  and  Peru,  "to  obtain 
and  furnish  information  pertinent  to  the  subject,  and  to  put  into 
effect  the  plans  outlined  in  the  reports  of  the  subcommittees  above 
alluded  to,  and,  further,  to  consider  and  report  to  the  chairman  of 
the  Pan  American  Financial  Conference  any  other  feasible  and  ef- 
fective plan  for  the  establishment  of  the  desired  expansion  of  ship- 
ping facilities."  There  were  two  subcommittees  of  the  Transporta- 
tion Committee,  each  of  which  presented  a  report  containing  recom- 
mendations. The  report  of  Seiiores  Aldao,  Cavalcanti,  and  Cosio 
representing,  respectively,  Argentina,  Brazil,  and  Uruguay,  sug- 
gested the  advisability  of  calling  for  bids  not  later  than  December 
31, 1915,  for  the  establishment  of  a  regular  line  of  fast  mail  steamers 
between  United  States  ports  and  Rio  de  Janeiro,  Montevideo,  and 
Buenos  Aires,  "  bidders  to  state  the  compensation  demanded  and  the 
period  of  the  contract,"  and  subject  to  other  conditions  outlined  in  the 
report,  and  concluded  as  follows: 

"  the  governments  of  the  respective  countries  to  agree  upon 
the  proportion  which  is  to  be  paid  by  each  and  upon  all 
other  details." 

The  report  of  Seiior  Vergara,  representing  Chile,  recites  that  the 
delegate  of  Peru,  Dr.  Alzamora,  and  the  delegate  of  Ecuador,  Dr. 
Gonzales,  although  approving  his  report,  could  not  sign  the  same 
for  want  of  the  necessary  authorization  from  their  Governments. 
Senor  Vergara's  report  recommends  the  organization  of  a  large  com- 
pany, subscription  to  the  capital  stock  of  which  may  be  made  by 
the  public,  the  balance  of  the  stock,  if  any,  to  be  taken  by  the  Gov- 
ernment of  the  United  States  and  the  Governments  of  those  Latin 
American  Republics  interested,  in  proportions  to  be  agreed  upon; 
the  company  to  be  organized  under  New  York  laws ;  the  steamers  to 
be  registered  in  the  different  countries  in  proportion  to  the  capital 
subscribed,  and  to  fly  the  flag  of  the  country  of  their  registration. 
It  is  unnecessary  to  recite  the  other  features  of  the  report,  as  it  is 
the  principle  that  is  important. 

I  stated  to  the  conference  that  I  did  not  think  it  wise  to  appoint 
the  International  Committee  on  Transportation,  as  suggested,  be- 
cause I  should,  as  Secretary  of  the  Treasury  of  the  United  States, 
have  to  appoint  a  committee  composed  of  representatives  of  foreign 
countries  to  deal  with  matters  in  their  own  States;  that  I  did  not 
believe  it  practicable,  and  that  it  seemed  to  me  that  each  country 
would  have  to  handle  the  matter  in  its  own  way;  that  this  was  not 
a  convention  for  the  purpose  of  determining  national  policies,  but  a 
conference  for  the  purpose  of  exchanging  views  and  suggesting 


LETTER  FROM  THE  SECRETARY  OF  THE  TREASURY.       13 

remedies;  that  we  could  not  with  propriety  discuss  Government 
ownership  or  subsidies  or  any  other  such  matter;  that  the  shipping 
question  had  become  something  of  a  political  controversy  in  the 
United  States,  and  that  the  conference  was  not  the  place  to  thresh  it 
out ;  that  I  thought  the  conference  should  confine  itself  to  a  consider- 
ation of  the  resolution  to  which  I  have  already  referred,  and  which 
was  unanimously  adopted  by  the  conference.  I  respectfully  invite 
your  attention  to  pages  283,  284,  and  290  of  the  proceedings  and  to 
the  report  of  the  committee  on  transportation,  which  will  be  found 
on  page  305  of  the  proceedings. 

It  is  appropriate  to  quote,  briefly,  from  the  remarks  of  Dr.  Samuel 
Hale  Pearson,  of  Argentina,  chairman  of  the  Committee  on  Trans- 
portation, who  said : 

"It  has  been  the  unanimous  opinion  of  all  of  us  North 
Americans  and  South  Americans  that  there  is  absolute  ne- 
cessity, in  the  interest  of  commerce  and  for  a  better  knowl- 
edge of  each  other,  that  some  method  be  arrived  at  for  the 
establishment  of  fast  steamship  communications  between 
North  and  South  America.  *  *  Everybody  knows  that 
we  want  fast  steamers,  and  fast  steamers  are  the  basis  and 
the  foundation  of  banking,  trading,  and  all  sorts  of  com- 
mercial relations.  It  is  useless — I  mean  it  is  a  little  pre- 
mature— for  us  to  try  to  establish  commercial  relations  if  we 
find  we  can  not  get  there.  The  first  thing  is  to  get  there, 
and  then  business  will  follow." 

The  question  of  adequate  steamship  facilities  is  fundamental  and 
underlies  every  other  question  concerning  our  trade  and  future  rela- 
tionships with  the  Latin  American  ^Republics.  The  ability  to  com- 
municate promptly  with  each  other,  at  frequent  intervals,  and  at 
reasonable  rates,  is  a  prerequisite.  It  is  too  obvious  to  need  discus- 
sion that  without  the  required  facilities  trade  can  not  be  built  up  or 
financial  relationships  be  established  or  friendly  intercourse  be 
promoted. 

The  quick  and  effective  solution  of  this  problem  is  for  the  Govern- 
ment of  the  United  States  to  put  itself  behind  a  shipping  enterprise, 
so  that  the  necessary  financial  support  to  make  it  successful  will  be 
assured.  It  is  an  undertaking  of  such  magnitude  that  the  Govern- 
ment alone  has  the  resources  and  the  power  to  act  quickly  and  to 
compass  it.  We  can  not  reasonably  expect  private  capital  in  this 
country  to  engage  in  this  essential  undertaking.  It  is  too  big  an  un- 
dertaking at  the  outset  for  private  capital.  Moreover,  the  claim  is 
made  that  our  navigation  laws  must  be  amended,  or  that  subsidies 
or  subventions  must  be  granted,  or  that  one  or  all  of  these  things 
must  be  done  before  private  capital  can  be  encouraged  to  engage  in 
shipping  enterprises.  But  if  any  or  all  of  these  things  should  be 


14  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

done,  there  is  no  assurance  or  guarantee,  nor  can  any  be  had,  that 
private  capital  in  sufficient  amount  will  come  forward  quickly  and 
provide  the  steamship  facilities  for  which  the  trade  and  commerce 
of  this  country  and  of  Central  and  South  America  are  acutely  suf- 
fering. The  shipping  field  has  for  many  years  failed  to  attract  Amer- 
ican capital  which  will  have  to  be  educated  to  shipping  enterprises,  no 
matter  what  laws  may  be  passed  by  the  Congress.  This  will  take  a 
long  time.  The  evolution  of  an  adequate  merchant  marine  through 
private  capital  will  be  extremely  slow  and  painfully  uncertain  if  it 
evolves  at  all.  Meantime  our  great  opportunity  to  serve  our  South 
American  friends  and  promote  our  own  interests  may  be  irretrievably 
lost. 

I  am  informed  by  the  Navy  Department  that,  in  order  to  bring 
our  present  Navy  up  to  its  maximum  usefulness  and  efficiency  in  time 
of  war,  there  is  needed  400  merchant  vessels  of  approximately 
1,172,000  gross  tonnage  of  varied  character  and  requirements;  that  in 
addition  to  this,  "  should  our  own  coast  be  invested  or  even  occasionally 
visited,  there  would  be  required  a  large  number  of  small  vessels  fitted 
for  mine  sweeping,  say,  324  of  such  vessels  of  about  150  gross  tons 
each."  We  have  only  a  small  portion  of  the  required  tonnage  in  suit- 
able merchant  vessels  of  the  larger  units  registered  under  our  flag. 
This  does  not  take  into  account  future  growth  of  our  Navy,  for  which 
additional  provision  must  be  made.  In  case  of  war,  if  that  misfor- 
tune should  ever  overtake  us,  our  Navy  would  be  seriously  handi- 
capped for  the  want  of  essential  naval  auxiliaries  unless  we  take 
prompt  steps  to  create  them.  It  would  seem  to  be  the  part  of  wis- 
dom and  intelligence  for  the  Government  of  the  United  States  to 
create,  promptly,  by  construction  and  purchase,  a  fleet  of  merchant 
vessels  suitable  for  naval  auxiliaries  and  to  operate  these  vessels  in 
time  of  peace  for  the  purpose  of  extending  our  commerce  throughout 
the  world,  and  creating  the  trained  seamen  upon  whose  skill  and 
valor  we  must  depen.d  for  the  operation  of  these  ships  and  the  de- 
fense of  our  countiy  in  time  of  war.  It  is  mere  assertion  to  say  that 
these  vessels  can  not  be  operated  in  commerce  at  a  profit ;  but  even  if 
this  be  conceded  and  the  ships  should  be  operated  at  a  loss,  which 
must  be  borne  by  the  Treasury,  this  loss  will  be  a  small  price  to  pay 
for  the  extension  of  our  commerce  and  the  defense  of  our  country. 
It  is  claimed  that  a  naval  auxiliary  composed  of  merchant  vessels 
is  just  as  essential  to  make  our  Navy  fully  effective  as  the  guns  on 
the  decks  of  our  warships  and  the  men  behind  those  guns.  If  this 
is  true,  it  is  the  duty  of  the  Government  to  provide  these  naval 
auxiliaries  without  delay.  Once  provided,  the  cost  of  maintaining 
them  idle  would  be  a  great  expense  and  charge  upon  the  Treasury, 
but  even  that  expense  would  be  justified  in  the  light  of  necessity. 


LETTER  FROM  THE  SECRETARY  OF  THE  TREASURY.       15 

But  how  much  more  intelligent  would  be  the  policy  of  operating 
these  naval  auxiliaries  in  time  of  peace  as  merchant  ships  for  the 
expansion  of  our  commerce  throughout  the  world,  and  applying  their 
earnings  in  mitigation  of  the  cost  of  maintenance.  The  net  loss,  if 
any,  would  be  a  small  price  to  pay  for  security,  while  a  profit,  if 
earned,  might  go  into  the  general  fund  of  the  Treasury  in  reduction 
of  taxation  or  be  used  as  an  improvement  fund  for  the  purchase  of 
additional  ships.  Is  not  our  wisest  course  to  create  the  necessary 
naval  auxiliary  and  use  it  at  the  same  time  as  a  merchant  marine  for 
our  South  American  and  foreign  trade  ? 

I  am  satisfied  that  the  Governments  of  South  America  to  whose 
ports  an  American  company,  backed  by  our  Government,  should  run 
ships  will  offer  every  possible  encouragement  in  the  way  of  port 
facilities,  favorable  port  charges,  regulations,  etc.  In  my  letter  to 
the  delegates,  dated  June"  19,  1915  (page  515  of  the  proceed- 
ings), I  have  asked  each  Government  for  some  useful  information 
about  shipping,  which  will  be  submitted  in  a  separate  report  as  soon 
as  received. 

While  it  was  not  expected  when  the  Pan  American  Financial  Con- 
ference was  conceived  that  the  shipping  question  would  be  considered 
by  that  conference,  it  was,  in  the  light  of  subsequent  events,  inevitable 
that  it  should  be  discussed  because  of  its  paramount  importance  and 
imperative  necessity. 

Next  in  importance  to  credits  and  shipping  facilities  was  the  sub- 
ject of  uniformity  of  laws.  A  committee  consisting  of  representa- 
tives of  every  country  represented  in  the  Conference  was  appointed. 

Its  report  will  be  found  on  page  297  of  the  proceedings.  The 
committee  recommended  that  uniformity  of  laws  be  considered  as 
to  the  following  subjects: 

1.  The  establishment  of  a  gold  standard  of  value. 

2.  Bills  of  exchange,  commercial  paper,  and  bills  of  lading. 

3.  Uniform  (a)  classification  of  merchandise,  (Z>)  customs  regula- 
tions, (c)  consular  certificates  and  invoices,  (d)  port  charges. 

4.  Uniform  regulations  for  commercial  travelers. 

5.  To  what  extent  further  legislation  may  be  necessary  concerning 
trade-marks,  patents,  and  copyrights. 

6.  The  establishment  of  a  uniform  low  rate  of  postage  and  of 
charges  for  money  orders  and  parcels  post  between  the  American 
countries. 

7.  The  extension  of  the  process  of  arbitration  for  the  adjustment 
of  commercial  disputes. 

The  committee  also  recommended  that,  for  the  purpose  of  bringing 
about  uniformity  of  laws  on  these  subjects,  "  there  be  established  an 
international  high  commission,  to  be  composed  of  not  more  than 


16  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

nine  members,  resident  in  each  country,  to  be  appointed  by  the  min- 
ister of  finance  of  such  country.  The  aggregate  members  thus  ap- 
pointed shall  constitute  the  commission."  This  report  was  unani- 
mously adopted  by  the  Conference,  and  in  pursuance  thereof  I  have 
appointed  a  commission  to  represent  the  United  States,  and  have 
(upon  the  informal  suggestions  subsequently  made  in  the  Conference 
that  the  minister  of  finance  or  secretary  of  the  treasury  of  each 
country  act  as  chairman  of  the  commission  of  his  country)  assumed 
the  chairmanship  of  the  United  States  Commission,  which  is  com- 
posed of  the  following : 

WILLIAM  G.  McADoo,  Secretary  of  the  Treasury,  chairman,  Washington, 
D.  C. 

JOHN  BASSETT  MOOBE,  vice  chairman,  Columbia  University,  New  York, 
N.  Y. 

JOHN  H.  FAHEY,  president  Chamber  of  Commerce  of  the  United  States, 
Boston,  Mass. 

DUNCAN  U.  FLETCHER,  president  Southern  Commercial  Congress,  Jackson- 
ville, Fla. 

D.  R.  FRANCIS,  St.  Louis,  Mo. 

E.  H.  GARY,  chairman  of  board,  United  States  Steel  Corporation,  New 
York,  N.  Y. 

A.  B.  HEPBURN,  chairman  board  of  directors,  Chase  National  Bank,  New 

York,  N.  Y. 
GEORGE  M.  REYNOLDS,  president  Continental  and  Commercial  National 

Bank,  Chicago,  111. 
SAMUEL  UNTERMYER,  New  York,  N.  Y. 

I  have  also  appointed  the  following : 

LEO  S.  ROWE,  Secretary  General. 

J.  BROOKS  B.  PARKER,  Assistant  Secretary  General. 

C.  B.  McGuiRE,  Assistant  to  the  Secretary  General. 

As  this  report  is  written  the  Governments  of  Bolivia,  Chile,  Cuba, 
Ecuador,  Panama,  and  Peru  have  appointed  high  commissions  for 
their  countries,  and  I  am  encouraged  to  believe  that  the  remainder 
of  the  countries  represented  in  the  conference  will  soon  take  similar 
action. 

The  commission  for  the  United  States  has,  of  course,  no  official 
status  at  the  present  time,  but  the  work  upon  which  it  has  entered  is 
of  such  great  importance  that  I  earnestly  recommend  that  you  request 
the  Congress  to  give  its  approval  and  make  a  small  appropriation 
to  enable  the  commission  to  meet  the  necessary  expenses  of  carrying 
on  its  labors.  The  task  is  both  big  and  difficult,  and  skilled  services 
will  be  required.  A  modest  appropriation  will  be  sufficient.  I 
recommend  that  the  sum  of  $25,000  be  granted. 

In  my  parting  letter  to  the  delegates  of  the  Governments  partici- 
pating in  the  conference,  dated  June  19,  1915  (page  515  of  the  pro- 
ceedings) ,  I  suggested  that  a  meeting  of  the  International  High  Com- 


LETTER  FROM  THE  SECRETARY  OF  THE  TREASURY.       17 

mission  be  held  in  Buenos  Aires  on  the  1st  day  of  November,  1915. 
The  time  may  be  too  short  to  hold  this  meeting.  In  that  event  a  later 
date  will  be  announced.  It  is  highly  desirable  that  as  rapid  progress 
as  possible  be  made  in  bringing  this  great  task  to  completion. 

There  are  many  laws  and  regulations  of  the  various  countries 
which  adversely  affect  trade  and  enlarged  intercourse  between  them. 
It  is  manifestly  to  the  interest  of  all  of  these  countries  that  these 
difficulties  be  removed.  Uniformity  of  laws  affecting  the  funda- 
mentals of  trade  and  finance  can  undoubtedly  be  realized  with  patient 
work  and  earnest  cooperation.  I  believe  that  as  a  result  of  the  Pan 
American  Financial  Conference  all  of  the  Governments  concerned 
are  now  fully  aroused  to  the  importance  of  securing  uniformity  of 
laws  as  far  as  practicable,  and  that  their  hearty  cooperation  is 
assured.  The  Postmaster  General  of  the  United  States  has  giA^en  his 
cordial  indorsement  to  the  principle  of  uniform  low  rates  of  postage 
and  charges  for  money  orders  and  parcels  post  between  the  Latin 
American  countries  and  the  United  States,  and  is  giving  the  Inter- 
national High  Commission  for  the  United  States  invaluable  as- 
sistance. 

Another  subject  of  very  great  importance  is  the  need  of  direct 
cable  communications  and  reasonable  rates  between  the  Latin  Ameri- 
can countries  and  the  United  States.  This  was  emphasized  by  many 
delegates  in  the  conference.  There  is  no  doubt  about  the  disad- 
vantages under  which  all  of  the  countries  of  Latin  America  and  the 
United  States  labor  on  account  of  the  present  roundabout  and  un- 
satisfactory facilities  and  the  excessive  cost  of  cable  communication 
between  them.  If  the  Congress  shall  grant  the  suggested  appropria- 
tion for  the  work  of  the  International  High  Commission,  it  will  be 
entirely  feasible  for  that  commission  to  investigate  this  question  and 
ascertain  and  report  to  what  extent  such  facilities  are  needed  and  how 
far  the  various  South  and  Central  American  Governments  will  co- 
operate in  establishing  them. 

Recognizing  the  fact  that  each  of  the  countries  represented  in  the 
Conference  had  its  own  distinctive  problems,  which  were  unrelated 
to  those  of  its  neighbors,  and  that  a  discussion  of  the  problems  of 
each  country  in  the  general  sessions  of  the  Conference  would  be  unde- 
sirable, if  not  impracticable,  a  series  of  group  conferences  were  ar- 
ranged in  the  following  manner : 

The  representatives  of  the  United  States  were  divided  into  eighteen 
groups,  one  of  which  was  assigned  to  each  of  the  countries  represented 
in  the  Conference.  Thus  the  delegates  of  each  foreign  country  were 
brought  into  contact  with  a  group  of  our  most  prominent  bankers 
and  business  men  and  were  able  to  discuss  freely  and  intimately  the 
problems  involved. 
98257°— 15 2 


18  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

This  plan  was  carried  out  with  highly  satisfactory  results.  The 
reports  of  these  group  conferences  are  published  in  full  in  the  accom- 
panying proceedings,  and  contain  a  vast  amount  of  information 
which  will  prove  of  great  value  in  the  promotion  of  better  financial 
and  commercial  relations  between  the  Latin- American  Republics  and 
the  United  States. 

It  is  clear  that  it  is  to  the  interest  of  all  of  the  countries  that  these 
group  committees  shall  be  continued  in  order  that  the  work  begun  in 
the  conference  may  be  carried  forward  without  interruption.  I  have 
appointed,  therefore,  eighteen  group  committees  in  this  country,  and 
have  assigned  one  of  them  to  each  of  the  Central  and  South  American 
countries,  thus  making  permanent  the  plan  adopted  with  so  much 
success  during  the  sessions  of  the  conference  itself.  These  commit- 
tees have,  of  course,  no  official  status  and  involve  no  expense  to  the 
Government,  but  will  act  as  voluntary  organizations  for  the  purpose 
of  fostering  closer  financial  and  commercial  relations  between  the 
United  States  and  Latin  America.  The  committees  will  serve  until 
the  Pan  American  Financial  Conference  of  1916  (if  one  shall  be  held 
that  year),  unless  sooner  relieved  from  further  service  by  the  Secre- 
tary of  the  Treasury  of  the  United  States.  I  have  suggested  that  the 
delegates  from  the  various  Latin  American  countries  continue  as 
group  committees  for  their  respective  countries,  so  that  they  can 
cooperate  with  the  group  committees  of  this  country  in  furthering  the 
objects  of  the  conference.  A  list  of  the  group  committees  so  ap- 
pointed will  be  found  on  page  528  of  the  proceedings. 

A  resolution  was  adopted  by  the  foreign  delegates  to  the  Confer- 
ence inviting  American  bankers  and  business  men  to  visit  the  various 
Central  and  South  American  countries.  In  conformity  therewith  I 
have  appointed  a  committee  of  business  men  and  bankers  in  this 
country  to  arrange  the  proposed  visit.  This  committee  has  likewise 
no  official  status,  nor  is  such  a  status  sought  or  needed.  The  object 
of  this  committee  will  be  to  arrange  the  itinerary  and  select  a  repre- 
sentative body  of  our  business  men  and  bankers  who  are  willing,  at 
their  own  expense,  to  make  the  proposed  trip.  No  appropriation 
for  this  purpose  is  asked  of  the  Congress.  A  list  of  the  committee 
so  appointed  will  be  found  on  page  527  of  the  proceedings.  I 
am  glad  to  say  that  this  committee  has  taken  hold  of  the  work  with 
great  enthusiasm  and  that  preparations  are  now  being  made  for  the 
proposed  visit. 

The  results  of  the  Pan  American  Financial  Conference  were  so 
satisfactory  that  I  am  convinced  that  it  will  be  of  great  advantage 
to  all  of  the  Republics  of  the  American  continent  to  hold  an  annual 
Pan  American  Financial  Conference  in  Washington.  I  have  sug- 
gested to  the  various  Governments  that  the  city  of  Washington  is. 


LETTER  FROM  THE  SECRETARY  OF  THE  TREASURY.       19 

on  the  whole,  the  most  convenient  place,  since  it  is  possible  to  secure 
a  larger  attendance  of  the  important  business  men  and  financiers  of 
the  United  States  in  Washington  than  elsewhere.  Moreover,  the 
Pan  American  Union  has  a  beautiful  building  in  Washington  with 
ideal  facilities,  which  can  doubtless  be  secured  always  for  such 
meetings. 

It  is  a  great  pleasure  to  acknowledge  the  courtesies  extended  by 
the  Pan  American  Union  to  the  Financial  Conference  of  1915  and  to 
testify  to  the  valuable  cooperation  of  the  directors  and  officers  of  the 
Pan  American  Union  in  all  that  has  been  done  and  in  all  that  w.e  are 
undertaking  to  do.  It  is  the  purpose  to  work  in  the  closest  harmony 
and  cooperation  with  the  Pan  American  Union. 

I  respectfully  suggest  that  you  request  the  Congress  of  the  United 
States  to  authorize  you  to  extend  an  invitation  to  the  Latin- American 
Eepublics  to  attend  another  Financial  Conference  in  Washington  in 
1916,  and  that  an  appropriation  of  $50,000  be  made  for  this  purpose. 
This  is  the  same  amount  as  the  appropriation  for  the  1915  Conference. 
I  earnestly  hope  that  this  recommendation  will  be  adopted,  because  I 
think  it  will  contribute  immeasurably  to  the  successful  progress  of 
the  work  so  auspiciously  begun  by  the  Conference  of  1915. 

My  suggestions  for  carrying  on  the  work  of  the  Pan  American 
Financial  Conference  and  for  establishing  improved  financial  and 
commercial  relations  between  Latin  America  and  the  United  States 
may  be  summarized  as  follows : 

First.  That  the  twelve  Federal  reserve  banks  establish  promptly 
joint  agencies  in  the  leading  cities  of  all  the  countries  of  Central  and 
South  America  for  the  purpose  of  providing  enlarged  credit  facili- 
ties, as  outlined  in  the  first  part  of  this  report. 

Second.  That  the  Government  of  the  United  States  provide 
promptly  the  necessary  steamship  facilities  by  subscribing  the  capital 
stock  of  a  corporation  organized  for  the  purpose  of  owning  and 
operating  the  necessary  steamship  lines. 

Third.  That  the  International  High  Commission  on  Uniformity  of 
Laws  be  granted  an  appropriation  of  $25,000  to  enable  it  to  carry 
on  the  important  work  it  has  undertaken  and  represent  the  United 
States  in  the  meeting  of  the  International  High  Commission  of  all 
the  Latin  American  Eepublics. 

Fourth.  That  a  Pan  American  Financial  Conference  be  held 
annually  in  the  city  of  Washington,  and  that  the  Congress  authorize 
the  President  to  extend  invitations  to  the  Kepublics  of  Latin  America 
to  attend  a  financial  conference  in  the  city  of  Washington  during  the 
year  1916,  and  that  an  appropriation  of  $50,000  be  made  for  said 
Conference. 


20  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

Meanwhile  the  group  committees  and  the  committee  to  arrange  for 
a  visit  of  our  representative  business  men  and  bankers  to  South  arid 
Central  America  will  carry  on  the  work  assigned  to  them  with 
earnestness  and  enthusiasm.  It  is  most  gratifying  to  note  the  deep 
and  general  interest  manifested  throughout  the  United  States  in  the 
Pan  American  Financial  Conference  and  in  the  subject  of  Pan 
Americanism. 

Respectfully, 

(Signed)  W.  G.  McADoo. 

The  PRESIDENT, 

The  White  House,  Washington,  D.  G. 


REPORT  OF  THE  SECRETARY  GEN- 
ERAL OF  THE  PAN  AMERICAN 
FINANCIAL  CONFERENCE  TO  THE 
SECRETARY  OF  THE  TREASURY 


REPORT  OF  DR.  I.  S.  ROWE,  SECRETARY  GENERAL  OF  THE  PAN 
AMERICAN  FINANCIAL  CONFERENCE,  TO  THE  HONORABLE 
W.  G.  McADOO,  SECRETARY  OF  THE  TREASURY. 


SIR  :  I  have  the  honor  to  submit  to  you  a  report  on  the  organiza- 
tion and  procedure  of  the  Pan  American  Financial  Conference  which 
convened  in  the  city  of  Washington  on  Monday,  May  24,  and  con- 
tinued in  session  until  Saturday,  May  29. 

At  the  request  of  the  Secretary  of  the  Treasury  the  original  invi- 
tation to  the  Conference  was  extended  to  the  respective  Governments 
of  Central  and  South  America  in  a  cable  instruction  issued  by  the 
Department  of  State  to  the  diplomatic  representatives  of  the  United 
States  in  the  countries  of  Central  and  South  America,  with  the  ex- 
ception of  Haiti  and  Mexico.  These  instructions  read  as  follows : 

DEPARTMENT  OF  STATE, 
Washington,  March  12,  1915. 
AMERICAN  EMBASSY  (OR  LEGATION)  : 

In  pursuance  of  a  provision  in  the  Diplomatic  and  Consular  appropriation 
act  approved  March  4,  1915,  you  are  instructed  to  extend,  in  the  name  of  the 
President,  an  invitation  to  the  Government  to  which  you  are  accredited  to 
appoint  delegates,  not  exceeding  three  in  number,  to  attend  a  conference  of  the 
Secretary  of  the  Treasury  in  Washington  on  May  10,  1915. 

The  Conference  will  be  held  with  a  view  to  establishing  closer  and  more 
satisfactory  financial  relations  between  the  Republics  of  America,  and  it  is 
hoped  that  the  Minister  of  Finance  of  the  respective  Governments  will  be  able 
to  attend  as  one  of  the  three  delegates  and  that  the  delegates  may  be  versed  in 
finance  and  in  banking  and  business  problems. 

The  delegates  who  may  be  appointed  hereunder,  while  they  are  in  this  coun- 
try, will  be  the  guests  of  the  United  States  of  America.  The  Secretary  of  State 
of  the  United  States  of  America  will  participate  in  the  Conference,  and  the 
diplomatic  representatives  to  the  United  States  of  America  of  the  respective 
countries  to  whom  this  invitation  is  sent  will  be  themselves  invited  to  attend 
the  Conference,  in  addition  to  the  members  whose  special  appointment  is  here 
invited. 

It  is  the  intention  of  the  Secretary  of  the  Treasury  to  invite  to  the  Conference, 
in  addition  to  the  above,  leading  and  representative  bankers  of  the  United 
States  of  America.  It  is  expected  that  the  Conference  will  discuss,  in  addition 
to  the  problems  of  banking,  problems  of  transportation  and  commerce  between 
the  various  countries  represented. 

The  President  especially  desires  you  in  communicating  the  invitation  to  im- 
press upon  the  Government  to  which  you  are  accredited  the  great  pleasure  it 

23 


24  PAN  AMERICAN   FINANCIAL  CONFERENCE. 

will  give  him  and  his  associates  in  the  Government  to  welcome  its  delegates  to 
the  Conference  and  to  extend  to  them  the  hospitality  of  the  Government  of  the 
United  States  of  America. 

( Signed)  BBYAN. 

A  later  telegram,  dated  March  31,  was  sent  to  the  same  legations, 
instructing  them  to  inform  the  Governments  to  which  they  were 
accredited  that  owing  to  the  illness  of  the  Secretary  of  the  Treasury 
the  meeting  of  the  Conference  had  been  postponed  until  May  24. 

The  invitation  thus  issued  met  with  an  immediate  and  hearty 
response.  All  the  countries  of  Central  and  South  America  were 
suffering  severely  from  the  effects  of  the  European  war  and  were 
looking  to  the  United  States  as  the  only  possible  source  of  relief  from 
the  financial  difficulties  with  which  they  were  confronted.  The  invi- 
tation to  the  Conference  wras  interpreted  as  an  indication  of  the  desire 
of  the  Government  and  people  of  the  United  States  not  only  to  enter 
into  closer  financial  and  commercial  relations  with  the  Republics  of 
Central  and  South  America,  but  also  as  an  expression  of  the  desire  to 
cultivate  a  spirit  of  cooperation  and  mutual  helpfulness. 

Soon  after  the  issuance  of  the  invitation  the  Governments  of  the 
countries  of  Central  and  South  America  began  to  make  appoint- 
ments of  delegates,  and  some  weeks  before  the  convening  of  the  Con- 
ference notice  of  such  appointments  had  been  received.  The  list  of 
delegates  thus  appointed  is  as  follows : 

ARGENTINA  :*  CUBA  : 

Senor  Dr.  Samuel  Hale  Pearson.  Senor    Dr.    Pablo    Desvernine    y 

Senor  Dr.  Ricardo  C.  Aldao.  Gald6s. 

Senor  Dr.  V.  Villamil.  Sefior  Dr.   Porfirio   Franca  y  Al- 

varez de  la  Campa. 
BOLIVIA:  Senor  Dr.  Octavio  Zayas  yAdfm. 

Senor  Dr.  Ignacio  Calder6n. 

Senor  Dr.  Adolfo  Balllvian.  DOMINICAN  REPUBLIC  : 

Senor  Dr.  Francisco  J.  Peynado. 
BRAZIL  :  Senor  Dr.  Enrique  Jimenez. 

Senhor  Dr.  Amaro  Cavalcanti. 

CHILE-  ECUADOR: 

Sefior  Dr.  Luis  Izquierdo.  Sefior  £r'  J?an  .Cu®va  G.ar<**- 

Senor  Dr.  Augiisto  Villanueva.  Senor  Dr.  Vicente  Gonzales  B. 

Senor  Dr.  Gonzalo  Vergara  Bulnes.  Senor  Dr-  Enrique  Gallardo. 

COLOMBIA  :  GUATEMALA  : 

Senor  Dr.  Santiago  Perez  Triana.  Senor  Dr.  Victor  Sdnchez  O^ana. 

Senor  Dr.  Roberto  Anclzar.  Senor  Dr.  Carlos  Herrera. 

Senor  Dr.  Juan  S.  Lara. 
COSTA  RICA: 

Sefior      Dr.      Mariano      Guardia  HONDURAS  : 

Carazo.  Sefior  Dr.  Leopoldo  Cordova. 

Senor  Dr.  John  M.  Keith.  Senor  Dr.  Daniel  Fortfn. 

*  Dr.  Villamil  and  Mr.  John  E.  Zimmermann  attended  the  conference  as  representa- 
tives of  the  Buenos  Aires  Chamber  of  Commerce. 


REPORT   OF   THE   SECRETARY   GENERAL.  25 

NICARAGUA  :  PERU  : 

Seiior  Dr.  Pedro  Rafael  Cuadra.  Seiior  Dr.  Isaac  Alzamora. 

Senor  Dr.  Albert  Strauss.  Senior  Dr.  Eduardo  Higginson. 

Senor  Dr.  Clifford  D.  Ham.  SALVADOR  : 

Seiior  Dr.  Alfonso  QuinCnez  M. 
PANAMA:  Senor  Dr.  Jose"  E.  Suay. 

Senor  Dr.  Aristides  Arjona.  Senor  Dr.  Roberto  Aguilar. 

Seiior  Dr.  Ranion  F.  Acevedo. 

Seiior  Dr.  Rarn6n  Arias,  jr.  URUGUAY  : 

Senor  Dr.  Pedro  Cosio. 

PARAGUAY-  Sefior  Dr'  Gabriel  Terra- 

Senor  Dr.  Hector  Velazquez.  «**>T  Dr.  Carlos  Maria  de  Pena. 

Senor      Dr.       William       Wallace  VENEZUELA: 
White.  Senor  Dr.  Pedro  Rafael  Rincones. 

The  delegates  began  to  arrive  in  this  country  early  in  May  and  were 
greeted  in  New  York  by  a  special  committee  appointed  by  the  Secre- 
tary of  the  Treasury.  The  membership  of  this  committee  was  as 
follows : 

DUDLEY  FIELD  MALONE,  Chairman. 

Martin  Vogel,  Vice  Chairman. 

Pierre  Jay.  B.  H.  Outerbridge.  Cabot  Ward. 

A.  H.  Wiggin.  William  A.  Marble.  Willard  D.  Straight. 

Henry  P.  Davison.  James  S.  Alexander.  A.  Barton  Hepburn. 

Frank  A.  Vanderlip.  William  Woodward.  James  A.  Farrell. 

Benjamin  Strong,  jr.  Sereno  S.  Pratt.  William  C.  Van  Antwerp. 

Jacob  H.  Schiff.  William  F.  Morgan.  Franklin  Q.  Brown. 

Dr.  H.  E.  Bard.  S.  R.  Bertron. 

As  soon  as  possible  after  their  arrival  in  New  York  a  preliminary 
announcement  was  sent  to  delegates  containing  a  list  of  questions  sub- 
mitted for  the  consideration  of  the  Conference  by  the  Secretary  of 
the  Treasury. 

QUESTIONS  SUGGESTED  BY  THE  SECRETARY  OF  THE  TREASURY  FOR  THE  CONSIDERA- 
TION OF  THE  GROUP  COMMITTEES. 

I.  Public  finance. 

Public  Revenues  and  Expenditures  as  Affected  by  Recent  Events  in  Europe. 

Measures  Adopted  to  Meet  the  Situation. 

Proposed  Remedies. 

Possibilities  of  International  Cooperation. 

II.  The  monetary  situation. 

Conditions  Prior  to  the  Outbreak  of  the  European  War. 

Effects  of  the  War. 

Possibilities  of  International  Cooperation. 

Outlook  for  Uniform  Monetary  Standards. 

III.  The  present  banking  situation. 

Conditions  Existing  Prior  and  Subsequent  to  the  Outbreak  of  the  European 

War. 

The  Establishment  of  Branch  Banks  and  of  Direct  Exchange. 
Possibilities  of  Further  International  Cooperation. 


26  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

IV.  The  fmanci-ng  of  public  improvements. 

(a)  The  Underwriting  of  National  Loans. 

(6)  The  Underwriting  of  Provincial  or  State  Loans. 

(c)  The  Underwriting  of  Municipal  Loans. 

(d)  The  Relation  of  Public  Credit  to  a  Well  Organized  System  of  Taxation 

and  a  Balanced  Budget. 

V.  The  financing  of  private  enterprises. 

(a)  The  Present  Needs  of  Public  Service  Companies,  such  as  Railroad,  Street 

Railway,  Electric  Light,  Gas,  a-nd  Power  Companies. 
(&)  The  Needs  of -Merchants  and  Manufacturers. 

(c)  The  Financing  of  Seasonable  Crops. 

(d)  The  Consideration  of  Plans  to  Secure  a  more  satisfactory  status  for  Col- 

lateral as  Security  for  Commodity  Loans. 

(e)  The  Possibility  of  Securing  Greater  Uniformity  in  the  Laws  relating  to 

Trade  and  Commerce,  in  Customs  Regulations,  and  the  more  effective 
Protection  of  Trade-Marks. 

VI.  The  extension  of  inter- American  markets. 

(a)  Long  Term  Credits  as  Means  of  Stimulating  Inter-American  Trade. 
(&)  Acceptances  and  Discounts  (including  warehouse  receipts)  as  a  Means  of 
Extending  Inter-American  Trade. 

(c)  The  Establishment  of  Direct  Exchange  (often  referred  to  as  "dollar  ex- 

change " )  as  a  Means  of  Extending  American  Trade. 

(d)  The  Adaptation  of  the  Manufactured  Products  of  the  United  States  to  the 

Needs  of  the  Nations  of  Central  and  South  America. 

(e)  Tariff  Laws  as  affecting  Trade  with  the  United  States. 

VII.  Merchant  marine  and  improved  transportation  facilities. 

(a)  Increased  and  Improved  Ocean  Transportation  Facilities. 

1.  The  present  needs  in  this  respect. 

2.  Statement  of  shipping  facilities  now  enjoyed. 

3.  Suggestions  as  to  the  best  means  of  securing  improved  transporta- 

tion service. 

4.  What  public  or  private  encouragement  for  improved  transportation 

facilities  can  be  expected  from  the  countries  represented  at  the 
Conference, 
(ft)  Improved  Postal  Facilities  (including  Money  Orders)  and  Parcel  Post. 

The  delegates  did  not  begin  to  arrive  in  Washington  until  the  19th 
and  20th  of  May  and  were  entertained  at  the  Hotel  Shoreham  as 
special  guests  of  the  Nation.  In  accordance  with  your  directions  every 
effort  was  made  to  provide  for  their  comfort  and  convenience  while 
in  this  country,  and  the  general  expressions  of  satisfaction  on  the 
part  of  the  delegates  indicated  that  these  efforts  were  entirely  suc- 
cessful. 

On  the  morning  of  Saturday,  May  22,  the  delegations  met  for  an 
informal  preliminary  conference  with  the  Secretary  of  the  Treasury; 
the  object  of  this  conference  being  to  present  to  them  the  main  pur- 
poses for  which  the  Conference  had  been  called,  and  to  facilitate  a 


REPORT    OF    THE   SECRETARY   GENERAL.  27 

frank  and  free  interchange  of  opinion.    In  opening  this  conference, 
Secretary  McAdoo  said : 

GENTLEMEN  AND  FELLOW  AMERICANS  :  Let  me  welcome  you  to  Washington 
and  assure  you  of  my  deep  gratitude  to  you  for  responding  so  promptly  and 
graciously  to  my  invitation,  especially  upon  such  short  notice.  It  occurred  to 
us  who  are  trying  to  get  the  machinery  of  this  Conference  in  motion  that  if  we 
might  meet  this  morning  in  advance  of  the  regular  sessions  and  exchange  ideas 
in  regard  to  the  features  of  the  convention  it  would  be  advantageous.  What  we 
hope  to  accomplish  by  this  Conference  is  to  have  a  free  and  frank  interchange 
of  views,  to  have  you  tell  us  as  much  as  you  are  willing  to  tell  us  about  your 
problems  and  about  your  situation  in  South  America,  and  tell  us  how  we  can 
cooperate  with  you  in  solving  any  of  your  problems ;  and  we  want  at  the  same 
time  to  get  the  benefit  of  what  you  tell  us  here  in  trying  to  solve  our  own 
problems. 

We  feel  that  the  time  has  come  when  there  ought  to  be  greater  cooperation 
in  a  material  way  between  the  nations  of  North  and  South  America.  I  do  not 
think  that  is  an  objectionable  kind  of  materialism.  The  right  kind  of  mate- 
rialism is  a  powerful  aid  to  national  prosperity.  Without  that  as  the  sub- 
stantial basis  for  national  and  individual  life  it  is  very  difficult  to  cultivate 
high  ideals  and  to  maintain  great  moral  power  or  to  exert  potential  moral 
influence. 

So,  in  asking  you  to  come  to  Washington  under  such  favorable  auspices  as 
you  do  come  and  to  take  up  with  us  in  a.  spirit  of  helpfulness  and  cooperation 
these  serious  problems  which  have  grown  out  of  this  great  world  struggle  we 
hope  that  we  may  be  of  mutual  benefit  to  one  another. 

In  working  out  the  method  of  conducting  this  Conference  I  thought  it  would 
be  an  advantage  if  we  divided  the  delegations  into  the  natural  divisions  which 
each  country  suggests,  and  that  the^  delegates  from  the  United  States,  who 
in  numbers,  but  not  in  abilities,  outnumber  you,  should  be  divided  into  18 
committees,  one  being  assigned  to  each  of  the  visiting  countries,  so  that  you 
might  have  a  series  of  group  conferences,  where  you  could  with  the  utmost 
freedom  and  candor  discuss  any  problems  peculiarly  or  distinctively  your  own. 
I  imagine — in  fact,  I  know — that  there  are  many  problems  of  your  respective 
countries  which  relate  to  public  finance  or  internal  development  or  internal 
economy,  and  that  nothing  would  be  gained  by  a  debate  of  such  matters  in  a 
general  session  of  the  Conference.  Therefore  I  have  felt  that  it  would  be 
wiser  if  these  group  conferences  were  arranged. 

It  is  our  purpose  to  appoint  the  ranking  member  of  each  visiting  delega- 
tion chairman  of  each  group  conference,  so  that  the  initiative  in  a  way  will 
be  with  you ;  that  is,  the  initiative  of  bringing  before  the  group  meetings  such 
subjects  as  you  may  wish  to  present.  I  would  therefore  suggest  that  after  the 
group  conferences  are  organized,  as  I  have  outlined,  the  chairmen  of  the 
delegations  present  .promptly  such  subjects  and  such  matters  as  they  may 
care  to  draw  to  the  attention  of  the  group  meetings.  That  will  bring  on 
discussion,  which  can  be  elaborated  to  such  extent  as  may  be  wise. 

You  will  find  that  the  delegates  from  the  United  States  will  be  most  anxious 
to  cooperate  with  you  and  to  facilitate  your  deliberations,  and  also  to  be  as 
useful  as  possible  in  the  discussion  of  these  problems. 

As  a  preliminary  to  the  General  Conference,  it  also  occurred  to  me  that  you 
may  have  some  memoranda  that  you  may  care  to  submit  for  the  consideration 
of  the  General  Conference.  There  are,  of  course,  a  large  number  of  questions 
that  have  a  common  interest  to  all  of  the  nations.  Such  questions  will  natu- 


28  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

rally  be  discussed  in  the  general  sessions  of  the  Conference.  If  you  have 
already  prepared  such  memoranda  or  suggestions  on  subjects  which  you  would 
like  to  have  brought  before  the  Conference,  and  if  you  care  to  submit  them 
now,  we  will  print  them  in  English  and  Spanish,  so  that  when  the  time  comes 
to  discuss  them  advance  information  will  be  at  hand.  It  is  not  necessary  that 
you  have  such  memoranda.  I  only  suggest  this  for  your  convenience  and  for 
the  information  of  all  tho  delegates  who  may  attend.  If  yon  have  not  such 
memoranda  prepared,  and  care  to  prepare  and  submit  them  by  Monday,  we  shall 
see  that  they  are  put  in  type  and  distributed  as  quickly  as  possible  thereafter. 

I  may  say  that  when  the  regular  Conference  assembles  Monday  next  we 
shall  be  very  happy,  indeed,  if  delegates  who  have  their  families  with  them 
will  bring  them  to  the  meeting.  The  President  will  address  the  Conference, 
and  you  gentlemen  will  also  deliver  addresses,  so  that  it  will  be  an  agreeable 
and  pleasant  occasion  for  the  ladies  to  witness. 

This  meeting  is  merely  for  an  informal  interchange  of  ideas.  We  are  most 
anxious  to  have  you  tell  us  anything  you  think  will  contribute  to  the  value 
of  the  discussions  and  the  successful  conduct  of  this  Conference,  and  if  you 
will  now  be  good  enough  to  respond  to  the  roll  call  we  shall  be  very  happy, 
indeed,  to  have  you  say  anything  you  wish  to  say. 

(After  the  roll  call  of  the  various  countries,  Secretary  McAdoo  said:) 

We  are  very  grateful  to  you  for  these  statements  and  for  the  expression  of 
these  kindly  and  generous  sentiments,  and  before  we  adjourn  I  wish  to  say  that 
I  do  earnestly  hope,  and  I  am  speaking  with  the  utmost  sincerity,  that  you  and 
each  of  you  will  not  fail  to  let  us  know  of  anything  on  earth  that  we  can  do  for 
you  here,  that  you  will  command  us  if  the  arrangements  are  not  satisfactory, 
or  if  there  is  anything  in  addition  that  we  can  do  to  contribute  to  your  happi- 
ness. We  have  such  an  organization  that  it  will  not  be  in  the  least  difficult  to 
communicate  at  any  time  your  wants  and  desires.  We  have  a  military  and 
naval  aid  assigned  to  each  delegation.  They  will  translate  your  wants  into 
realities. 

The  Secretary  added : 

It  has  occurred  to  me  that  possibly  you  might  care  to  visit  the  Bureau  of  En- 
graving  and  Printing  this  afternoon,  which  is  one  of  the  handsome  new  build- 
ings of  the  city.  Here  the  Government  prints  all  of  its  paper  money,  stamps, 
and  securities.  I  think  we  do  some  work  at  times  for  our  sister  Republics.  We 
shall  have  automobiles  meet  you  at  the  hotel  at  1.30  p.  in. 

The  formal  opening  of  the  conference  took  place  on  Monday  morn- 
ing, May  24.  At  this  session  the  President  of  the  United  States  de- 
livered an  address  (see  p.  87),  and  a  formal  welcome  on  behalf  of 
the  Government  of  the  United  States  was  extended  to  the  delegates 
by  the  Secretary  of  State  (see  p.  89).  Responses  immediately  fol- 
lowed by  the  chairman  of  each  delegation.  Shortly  after  12  o'clock 
the  members  of  the  conference  were  received  by  the  President  of  the 
United  States  at  the  White  House. 

At  the  opening  of  the  session  of  Monday  afternoon,  May  24,  the 
Secretary. of  the  Treasury  delivered  an  address  outlining  the  pur- 
poses of  the  conference  and  pointing  out  the  results  that  could  be 
accomplished  through  the  interchange  of  opinion  at  such  an  inter- 
national gathering  (see  p.  113).  The  address  of  the  Secretary  of  the 


REPORT   OF   THE   SECRETARY   GENERAL.  29 

Treasury  was  followed  by  addresses  by  the  Postmaster  General,  the 
Hon.  Albert  S.  Burleson  (see  p.  119),  and  by  the  Secretary  of  Com- 
merce, the  Hon.  William  C.  Redfield  (see  p.  122) .  At  the  close  of  this 
afternoon's  session  informal  addresses  were  delivered  by  several 
members  of  the  conference,  and  the  Secretary  of  the  Treasury  then 
announced  the  membership  of  the  group  committees. 

The  session  of  Tuesday  morning,  May  25,  was  devoted  to  ad- 
dresses delivered  by  the  Hon.  Charles  S.  Hamlin,  Governor  of  the 
Federal  Reserve  Board  (see  p.  152),  and  by  the  Hon.  Paul  M.  War- 
burg, member  of  the  Federal  Reserve  Board  (see  p.  165). 

On  Tuesday  afternoon  the  group  committees  met  for  the  first 
time  in  the  special  meeting  rooms  reserved  for  them  at  the  Hotel 
Shoreham.  These  meetings  continued  through  Tuesday  afternoon 
and  all  day  Wednesday. 

In  accordance  with  the  plan  formulated  by  the  Secretary  of  the 
Treasury  the  representatives  from  the  United  States  were  divided 
into  18  groups,  each  group  assigned  to  one  of  the  countries  repre- 
sented at  the  conference.  Each  group  conference  committee  was 
thus  composed  of  the  members  of  an  official  foreign  delegation 
together  with  a  group  of  financiers  and  business  men  from  the 
United  States.  The  sessions  of  these  group  committees  were  held 
behind  closed  doors,  thus  affording  the  opportunity  for  the  freest 
interchange  of  opinion.  The  financial  and  commercial  needs  of  the 
countries  of  Central  and  South  America  were  presented  at  these  ses- 
sions, and  the  representatives  of  the  United  States  submitted  their 
views  as  to  the  best  way  in  which  such  needs  may  be  met.  It  is  no 
exaggeration  to  say  that  out  of  these  group  conferences  the  founda- 
tion was  laid  for  permanent  and  helpful  cooperation  between  the 
financiers  and  merchants  of  North  America  and  Central  and  South 
America. 

On  Thursday  morning,  May  27,  the  fourth  general  session  was 
held,  at  which  addresses  were  delivered  by  the  Hon.  Joseph  E.  Davies, 
Chairman  of  the  Federal  Trade  Commission  (see  p.  195),  and  the 
Hon.  John  Barrett,  Director  General  of  the  Pan  American  Union  (see 
p.  200).  These  addresses  were  followed  by  some  general  discussion 
and  by  the  consideration  of  a  number  of  matters  that  had  been  sub- 
mitted to  the  conference  during  the  days  immediately  preceding. 

Friday  morning,  May  28,  was  devoted  to  group  conferences.  Many 
of  the  group  committees  completed  their  reports,  and  at  the  sixth 
general  session,  held  Friday  afternoon,  May  28,  announced  them- 
selves prepared  to  submit  such  reports  to  the  conference.  The  gen- 
eral sessions  of  Friday  afternoon,  Saturday  morning,  and  Saturday 
afternoon  were  devoted  to  a  presentation  and  consideration  of  the 
reports  of  the  two  general  committees  and  of  the  group  committee 


30  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

reports  (see  pages  297  and  311ff).  A  summary  of  the  latter  was  pre- 
sented to  the  conference  by  the  Hon.  John  Bassett  Moore  (see  pages 
250f,  265,  275,  277). 

It  became  apparent  early  in  the  proceedings  of  the  Conference  that 
the  subject  that  was  uppermost  in  the  minds  of  all  delegates  was  the 
improvement  of  transportation  and  means  of  communication,  espe- 
cially of  shipping  facilities  between  the  United  States  and  the  coun- 
tries of  Central  and  South  America.  At  the  suggestion  of  several 
delegations,  a  "  General  Committee  on  Transportation  and  Means  of 
Communication  "  was  appointed  by  the  chairman  of  the  Conference. 
This  committee  was  composed  as  follows : 

GENERAL  COMMITTEE  ON  THAN  SPORT  ATION  AND  COMMUNICATION. 

ARGENTINE  DELEGATION  : 

Senor  Dr.  Samuel  Hale  Pearson. 

Senor  Dr.  Ricardo  C.  Aldao. 

Sefior  Dr.  V.  Villamil. 

Senor  Dr.  John  E.  Zimmerman. 
BRAZILIAN  DELEGATION  : 

Senhor  Dr.  Amaro  Cavalcanti. 
CHILEAN  DELEGATION  : 

Senor  Dr.  Luis  Izquierdo. 

Senor  Dr.  Augusto  Villanueva. 

Senor  Dr.  Gonzalo  Vergara  Bulnes. 

ECUADOREAN   DELEGATION  : 

Senor  Dr.  Vicente  Gonzales  B. 
PERUVIAN  DELEGATION  : 

Senor  Dr.  Isaac  Alzamora. 

Senor  Dr.  Eduardo  Higginson. 
URUGUAYAN  DELEGATION  : 

Senor  Dr.  Pedro  Cosio. 

Senor  Dr.  Gabriel  Terra. 

Senor  Dr.  Carlos  Maria  de  Pena. 
REPRESENTATIVES  OF  THE  UNITED  STATES: 

The  Hon.  D.  R.  Francis. 

The  Hon.  Edward  M.  Hurley. 

Mr.  Franklin  Q.  Brown. 

Mr.  Paul  Fuller. 

Mr.  George  W.  Norris. 

Mr.  R.  Goodwin  Rhett. 

Mr.  Sol  Wexler. 

Mr.  Harry  A.  Wheeler. 

Mr.  J.  G.  White. 

This  committee  held  several  sessions  and  its  report  will  be  found 
in  the  proceedings,  page  305. 

Another  general  committee  appointed  by  the  chairman  of  the  Con- 
ference was  intrusted  with  the  consideration  of  "  Uniformity  in  the 
Laws  Relating  to  Trade  and  Commerce  and  the  Establishment  of  an 


REPORT    OF    THE    SECEETAEY   GENERAL.  31 

International  Commercial  Court."    This  committee  was  constituted 
as  follows  : 

Chairman,  Honorable  WILLIAM  C.  REDFIELD. 

Senor  Dr.  Samuel  Hale  Pearson,  Argentina. 

Seiior  Dr.  Igiiacio  Calderon,  Bolivia. 

Senhor  Dr.  Aniaro  Cavalcanti,  Brazil. 

Senor  Dr.  Luis  Izquierdo.  Chile. 

Seiior  Dr.  Santiago  Perez  Triana,  Colombia. 

Seiior  Dr.  Roberto  Ancizar,  Colombia. 

Senor  Dr.  John  M.  Keith,  Costa  Rica. 

Senor  Dr.  Pablo  Desvernine  y  Galdos,  Cuba. 

Senor  Dr.  Francisco  J.  Peynado,  Dominican  Republic. 

Seiior  Dr.  Vicente  Gonzales  B.,  Ecuador. 

Senor  Dr.  Juan  S.  Lara,  Guatemala. 

Senor  Dr.  Leopoldo  Cordova,  Honduras. 

Senor  Dr.  Pedro  Rafael  Cuadra,  Nicaragua. 

Seiior  Dr.  Ram6n  F.  Acevedo,  Panama. 

Senor  Dr.  William  Wallace  White,  Paraguay. 

Senor  Dr.  Isaac  Alzamora,  Peru, 

Senor  Dr.  Alfonso  QuinCnez  M.,  Salvador. 

Senor  Dr.  Carlos  Maria  de  Pena,  Uruguay. 

Senor  Dr.  Pedro  Rafael  Rincones,  Venezuela. 
Members  representing  the  United  States : 

The  Honorable  Charles  S.  Harnlin. 

The  Honorable  John  Barrett. 

The  Honorable  Charles  A.  Conant. 

The  Honorable  David  R.  Francis. 

The  Honorable  John  Hays  Hammond. 

The  Honorable  John  Bassett  Moore. 

The  Honorable  Robert  W.  Woolley. 

Mr.  George  H.  Numsen. 

Mr.  W.  L.  Saunders. 

Mr.  Benjamin  Strong,  jr. 

Mr.  Willard  Straight. 

Mr.  Samuel  Untermyer. 

This  committee  held  several  sessions,  and  in  the  final  report  recom- 
mended the  establishment  of  an  International  High  Commission, 
composed  of  nine  members  resident  in  each  country  represented  at 
the  Conference  appointed  by  the  respective  ministers  of  finance. 
(For  report  see  p.  299.) 

The  final  sessions  of  the  Conference  were  held  on  Saturday  morn- 
Jng  and  Saturday  afternoon,  May  29,  at  which  further  considera- 
tion was  given  to  the  reports  of  the  general  committees  and  the  group 
committees. 

On  Saturday  evening,  May  29,  the  Secretary  of  the  Treasury 
tendered  a  banquet  to  the  members  of  the  Conference,  at  which  a 
series  of  addresses  were  delivered.  (See  p.  469.) 

Adequate  accommodations  for  so  important  a  Conference  were 
made  possible  by  the  generosity  of  the  members  of  the  Governing 


32  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

Board  of  the  Pan  American  Union,  who  placed  their  magnificent 
building  at  the  disposal  of  the  Conference.  That  we  were  able  to 
meet  every  requirement  for  the  general  sessions  as  well  as  for  the 
general  committee  meetings  is  due  to  the  efficient  executive  organiza- 
tion of  the  Director  General  of  the  Pan  American  Union,  the  Hon. 
John  Barrett,  and  I  desire  to  take  this  opportunity  to  record  a  deep 
sense  of  obligation  to  the  governing  board  of  the  Pan  American 
Union,  as  well  as  to  the  Director  General,  for  their  cordial  co- 
operation. 

This  report  would  be  incomplete  were  I  not  to  avail  myself  of  the 
opportunity  to  express  to  you,  Mr.  Secretary,  my  most  sincere 
appreciation  of  the  cordial  and  earnest  support  which  you  gave  to  the 
secretary  general's  office  during  the  period  immediately  preceding  the 
Conference  as  well  as  during  the  sessions.  I  also  desire  to  express 
a  deep  sense  of  obligation  to  the  Hon.  Andrew  J.  Peters,  Assistant 
Secretary  of  the  Treasury,  for  most  helpful  assistance,  as  well  as  to 
the  assistant  secretaries  general,  Messrs.  Gittings,  Parker,  Miles, 
and  Sands. 

Immediately  upon  the  adjournment  of  the  Conference  the  problem 
which  confronted  the  Secretary  of  the  Treasury  was  to  make  the 
work  of  the  Conference  effective  and  to  give  to  it  a  permanent  organ- 
ization. With  this  end  in  view,  four  important  steps  are  to  be  taken : 
First,  the  appointment  by  the  Finance  Minister  or  Secretary  of  the 
Treasury  of  each  of  the  countries  represented  at  the  Conference  of 
an  International  High  Commission  composed  of  nine  members  from 
each  country.  The  mission  of  these  commissions  is  to  bring  about 
greater  uniformity  in  legislation  relating  to  trade  and  commerce  and 
in  business  methods  and  procedure,  and  also  to  promote  the  establish- 
ment of  an  international  commercial  court.  Secondly,  the  appoint- 
ment of  permanent  group  committees  in  the  United  States,  each  com- 
mittee assigned  to  one  of  the  countries  represented  at  the  Conference. 
These  committees  are  to  serve  as  centers  of  information  to  which 
financiers  and  merchants  both  in  the  United  States  and  in  the  coun- 
tries to  which  such  committees  are  assigned  may  refer  for  informa- 
tion and  guidance.  Third,  the  appointment  of  a  committee  to  ar- 
range for  a  visit  of  American  financiers  and  business  men  to  Central 
and  South  America.  This  committee  is  appointed  in  response  to 
an  invitation  extended  by  the  foreign  delegations  of  the  countries 
represented  at  the  Conference.  Fourth,  the  taking  of  such  steps  as 
may  tend  toward  the  solution  of  the  problem  of  efficient  transporta- 
tion and  communication  between  the  Americas. 

This  Financial  Conference  marks  an  epoch  in  the  relations  betweeen 
the  United  States  and  the  countries  of  Central  and  South  America. 
In  one  sense,  the  questions  discussed  were  of  a  material  character, 


REPORT   OF   THE   SECRETARY  GENERAL.  33 

but  it  is  through  the  spirit  of  cooperation  developed  in  the  solution 
of  these  material  problems  that  the  foundations  are  laid  fcr  that 
closer  relationship  and  spirit  of  unity  which  mean  so  much  to  the 
nations  of  the  American  Continent  and  without  which  they  can  not 
hope  to  fulfill  the  world  mission  which  they  are  called  upon  to 
perform. 
I  beg,  sir,  to  remain,  your  obedient  servant, 

L.  S.  ROWE, 
Secretary  General. 
To  the  Honorable 

WILLIAM  GIBBS  McAooo, 

Secretary  of  the  Treasury. 

98257°— 15 3 


PROGRAM  OF  THE  CONFERENCE 
AND  LIST  OF  QUESTIONS  SUB- 
MITTED  BY  THE  SECRETARY  OF 
THE  TREASURY  FOR  CONSIDERA- 
TION OF  THE  CONFERENCE 


35 


PROGRAM  OF  THE  PAN-AMERICAN  FINANCIAL 
CONFERENCE 


37 


PRESIDING   OFFICER 

THE  SECRETARY  OF  THE  TREASURY 
The  HONORABLE  WILLIAM  G.  McADOO 


HONORARY  PRESIDENTS. 

Their  Excellencies  the  Ministers  of  Finance — 

Senor  Dr.  ENRIQUE  CARBO .Argentina. 

Senor  Dr.  CASTO  ROJAS Bolivia. 

Senhor  Dr.  SABINO  BARROSO .  _  Brazil. 

Senor  Dr.  ALBERTO  EDWARDS Chile. 

Senor  Dr.  JORGE  VELEZ _  _  Colombia. 

Senor  Dr.  MARIANO  GUARDIA  CARAZO Costa  Rica. 

Senor  Dr.  LEOPOLDO  CANCIO  E Cuba. 

Senor  Dr.  SALVADOR  B.  GAUTIER Dominican  Republic. 

Senor  Dr.  AGUSTIN  CABEZAS Ecuador. 

Senor  Dr.  GUILLERMO  AGUIRRE Guatemala. 

Senor  General  LEOPOLDO  CORDOVA Honduras. 

Senor  Dr.  EULOGIO  CUADRA _  r  Nicaragua. 

Senor  Dr.  ARISTIDES  ARJONA Panama. 

Senor  Dr.  JERONIMO  ZUBIZARRETA ._  Paraguay. 

Senor  Dr.  LINO  FELYSE  VILLARAN  _  _          . .  Peru. 

Senor  Dr.  SAMUEL  LUNA _  Salvador. 

Senor  Dr.  PEDRO  Cosio Uruguay. 

Seiior  Dr.  ROMAN  CARDENAS  _ .  .  _  Venezuela. 


VICE  PRESIDENTS. 

The  Honorable  ANDREW  J.  PETERS,  Assistant  Secretary  of  the 
Treasury. 

Senor  Dr.  SAMUEL  HALE  PEARSON,  Chairman  of  Argentina  Delegation. 

Seiior  Dr.  IGNACIO  CALDERON,  Chairman  of  Bolivia  Delegation. 

Senhor  Dr.  AMARO  CAVALCANTI,  Chairman  of  Brazil  Delegation. 

Senor  Dr.  Luis  IZQUIERDO,  Chairman  of  Chile  Delegation. 

Senor  Dr.  SANTIAGO  PEREZ  TRIANA,  Chairman  of  Colombia  Delega- 
tion. 

Senor  Dr.  MARIANO  GUARDIA  CARAZO,  Chairman  of  Costa  Rica  Dele- 
gation. 

Senor  Dr.  PABLO  DESVERNINE  Y  GALDOS,  Chairman  of  Cuba  Delega- 
tion. 

Senor  Dr.  FRANCISCO  J.  PEYNADO,  Chairman  of  Dominican  Republic 
Delegation. 

Senor  Dr.  JUAN  CUEVA  GARCIA,  Chairman  of  Ecuador  Delegation. 

Senor  Dr.  VICTOR  SANCHEZ  OCANA,  Chairman  of  Guatemala  Delega- 
tion. 

Senor  Dr.  LEOPOLDO  CORDOVA,  Chairman  of  Honduras  Delegation. 

Seiior  Dr.  PEDRO  RAFAEL  CUADRA,  Chairman  of  Nicaragua  Delegation. 

Senor  Dr.  ARISTIDES  ARJONA,  Chairman  of  Panama  Delegation. 

Senor  Dr.  HECTOR  VELAZQUEZ,  Chairman  of  Paraguay  Delegation. 

Senor  Dr.  ISAAC  ALZAMORA,  Chairman  of  Peru  Delegation. 

Seiior  Dr.  ALFONSO  QUINONEZ  M.,  Chairman  of  Salvador  Delegation. 

Senor  Dr.  PEDRO  Cosio,  Chairman  of  Uruguay  Delegation. 

Senor  Dr.  PEDRO  RAFAEL  RINCONES,  Chairman  of  Venezuela  Dele- 
gation. 

40 


OFFICIAL  DELEGATIONS. 

ARGENTINA  :* 

Senor  Dr.  Samuel  Hale  Pearson. 
Senor  Dr.  Ricardo  C.  Aldao. 
Senor  Dr.  V.  ViUamil. 

BOLIVIA  : 

Senor  Dr.  Ignacio  Calder6n. 
Senor  Dr.  Adolfo  Ballivian. 

BRAZIL  : 

Senhor  Dr.  Ainaro  Cavalcanti. 

CHILE  : 

Senor  Dr.  Luis  Izquierdo. 
Senor  Dr.  Augusto  Villanueva. 
Senor  Dr.  Gonzalo  Vergara  Bulnes. 

COLOMBIA: 

Senor  Dr.  Santiago  Perez  Triana. 
Senor  Dr.  Roberto  Anclzar. 

COSTA  RICA  : 

Senor  Dr.  Mariano  Guardia  Carazo. 
Senor  Dr.  John  M.  Keith. 

CUBA: 

Senor  Dr.  Pablo  Desvernine  y  Gald6s. 

Senor  Dr.  Porfirio  Franca  y  Alvarez  de  la  Camp  a. 

Senor  Dr.  Octavio  Zayas  y  Adan. 

DOMINICAN  REPUBLIC: 

Senor  Dr.  Francisco  J.  Peynado. 
Senor  Dr.  Enrique  Jimenez.  . 

ECUADOR  : 

Senor  Dr.  Juan  Cueva  Garcia. 
Senor  Dr.  Vicente  Gonzales  B. 
Senor  Dr.  Enrique  Gallardo. 

GUATEMALA  : 

Senor  Dr.  Victor  Sanchez  Ocana. 
Senor  Dr.  Carlos  Herrera. 
Senor  Dr.  Juan  S.  Lara. 

*  Dr.  Villarail  and  Mr.  John  E.  Zimmermann  attended  the  conference  as  representa- 
tives of  the  Buenos  Aires  Chamber  of  Commerce. 

41 


42  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

HONDURAS  : 

Senor  Dr.  Leopoldo  Cordova. 
Senor  Dr.  Daniel  Fortin. 

NICARAGUA: 

Senor  Dr.  Pedro  Rafael  Cuadra. 
Senor  Dr.  Albert  Strauss. 
Senor  Dr.  Clifford  D.  Ham. 

PANAMA: 

Senor  Dr.  Aristides  Arjona. 
Senor  Dr.  Ram6n  F.  Acevedo. 
Senor  Dr.  Ramon  Arias,  Jr. 

PARAGUAY: 

Senor  Dr.  Hector  Velazquez. 
Senor  Dr.  William  Wallace  White. 

PERU: 

Senor  Dr.  Isaac  Alzamora. 
Senor  Dr.  Eduardo  Higgiiison. 

SALVADOR : 

Senor  Dr.  Alfonso  Quinonez. 
Senor  Dr.  Jose  E.  Suay. 
Senor  Dr.  Roberto  Aguilar. 

URUGUAY  : 

Senor  Dr.  Pedro  Cosio. 

Senor  Dr.  Gabriel  Terra. 

Senor  Dr.  Carlos  Maria  de  Pena. 

VENEZUELA : 

Senor  Dr.  Pedro  Rafael  Rincones 


MEMBERS  OF  THE  DIPLOMATIC  CORPS  INVITED  TO  ATTEND 
THE  CONFERENCE. 

His  Excellency  the  Ambassador  of  Argentina. 

His  Excellency  the  Ambassador  of  Brazil. 

His  Excellency,  the  Ambassador  of  Chile. 

The  Minister  of  Bolivia. 

The  Minister  of  Colombia. 

The  Minister  of  Costa  Rica. 

The  Minister  of  Cuba. 

The  Minister  of  the  Dominican  Republic. 

The  Minister  of  Ecuador. 

The  Minister  of  Guatemala. 

The  Minister  of  Honduras. 

The  Minister  of  Nicaragua. 

The  Minister  of  Panama. 

The  Minister  of  Paraguay. 

The  Minister  of  Peru. 

The  Minister  of  Salvador. 

The  Minister  of  Uruguay. 

The  Minister  of  Venezuela. 

43 


REPRESENTATIVES   OF  THE   UNITED   STATES   IN   ATTEND- 
ANCE AT  THE  CONFERENCE. 

Aerts,  G.  A.,  Chamber  of  Commerce,  Cincinnati.     (Costa  Rica.) 

Allen,  Frederic  W.,  Lee  Higginson  &  Co.,  Boston  [vice  J.  J.  Storrow]. 
(Peru.) 

Ardrey,  J.  Howard,  Cashier  City  National  Bank,  Dallas.     (Salvador.) 

Arnold,  J.  J.,  Banker,  Chicago.     (Peru.) 

Austin,  Richard  L.,  Chairman  Federal  Reserve  Bank,  408  Chestnut 
Street,  Philadelphia.  (Nicaragua.) 

Babson,  Roger  W.,  Statistician,  Boston.     (Peru.) 

Bancroft,  Chas.  G.,  President  International  Trust  Co.,  Boston. 

Barrett,  Hon.  John,  Director-General  Pan-American  Union,  Wash- 
ington. 

Bippus,  W.  F.,  Treasurer  National  Cash  Register  Co.,  Dayton. 
(Bolivia.) 

Bixby,  William  K.,  American  Car  &  Foundry  Co.,  St.  Louis.  (Uru- 
guay.) 

Boyd,  L.  C.,  Banker,  Indianapolis.     (Paraguay.) 

Brand,  Charles  J.,  Chief,  Office  of  Markets  and  Rural  Organization, 
Department  of  Agriculture,  Washington.  (Costa  Rica.) 

Brown,  F.  Q.,  Redmond  &  Co.,  New  York.     (Cuba.) 

Brown,  James,  New  York.     (Nicaragua.) 

Bryan,  Hon.  Wm.  Jennings,  Secretary  of  State,  Calumet  Place,  NW., 
Washington. 

Burke,  John,  Treasurer  of  the  United  States,  Washington.  (Salva- 
dor.) 

Burleson,  Hon.  Albert  Sidney,  Postmaster  General,  1901  F  Street, 
NW.,  Washington. 

Butterworth,  William,  President  Deere  &  Co.,  Moline,  111.  (Uru- 
guay.) 

Clausen,  John,  Manager  Foreign  Department,  Crocker  National 
Bank,  San  Francisco.  (Ecuador.) 

Clapham,  A.  G.,  President  Commercial  National  Bank,  Washington. 
(Panama.) 

Conant,  Charles  A.,  32  Liberty  Street,  New  York.     (Cuba.) 

Conklin,  Franklin,  Newark.     (Ecuador.) 

Cone,  Caesar,  Cotton  Manufacturer,  Greensboro.     (Brazil.) 

Goolidge,   J.   Randolph,   Architect,   Boston.     (Panama.) 

44 


PROGRAM   AND  LIST   OF   QUESTIONS.  45 

Cornell,  Charles  L.,  Treasurer  Niles-Bement-Pond  Co.,  Ill  Broad- 
way, New  York.  (Venezuela.) 

Crane,   Charles  R.,   Manufacturer,   Chicago.     (Panama.) 

Curtiss,  Frederic  R.,  Chairman  Federal  Reserve  Bank,  53  State 
Street,  Boston.  (Salvador.) 

Davies,  Hon.  Joseph  E.,  Chairman  Federal  Trade  Commission,  2117 
Le  Roy  Place,  NW.,  Washington.  (Colombia.) 

Deans,  H.  G.  P.,  Manager  Foreign  Department,  Merchants'  Loan  & 
Trust  Co.,  Chicago.  (Salvador.) 

Delano,  Frederick  A.,  Vice-Governor  Federal  Reserve  Board,  1128 
Sixteenth  Street,  Washington.  (Argentina.) 

De  Lanoy,  William  C.,  Director  Bureau  of  War  Risk  Insurance, 
Treasury  Department,  Washington.  (Honduras.) 

de  Lima,  E.  A.,  Banker,  58  West  Eighth  Street,  New  York.  (Costa 
Rica.) 

de  Navarro,  Alfonso,  Vice  President  Atlas  Portland  Cement  Co., 
New  York.  (Paraguay.) 

Douglas,  William  H.,  Merchant,  New  York.     (Peru.) 

Downey,  Hon.  George  E.,  Comptroller  of  the  Treasury,  Washington. 

Duval,  G.  L.,  25  Broad  Street,  New  York.     (Peru.) 

Eaton,  Frederick  H.,  President  American  Power  &  Foundry  Co., 
New  York.  (Chile.) 

Edson,  John  Joy,  President  Washington  Loan  &  Trust  Co., 
Washington.  (Venezuela.) 

Eldridge,  H.  R.,  Vice  President  National  City  Bank,  New  York. 
(Uruguay.) 

Elliott,  Hon.  Milton  C.,  Counsel  Federal  Reserve  Board,  Washing- 
ton. (Bolivia.) 

Emerson,  Guy,  80  Wall  Street,  New  York.     (Dominican  Republic.) 

Erskine,  A.  R.,  The  Studebaker  Corporation  of  South  Bend,  Ind. 
(Paraguay.) 

Esberg,  A.  I.,  1020  Second  Avenue,  New  York.     (Cuba.) 

Fahey,  John  H.,  President  of  the  United  States  Chamber  of  Com- 
merce, Tremont  Building,  Boston.  (Paraguay.) 

Fairchild,  Samuel  W.,  Fairchild  Bros.  &  Foster,  New  York.     (Peru.) 

Falconer,  Charles  E.,  President  Merchant  and  Manufacturers  Asso- 
ciation, Baltimore.  (Dominican  Republic.) 

Fancher,  E.  R.,  Governor  Federal  Reserve  Bank,  Williamson  Build- 
ing, Cleveland.  (Dominican  Republic.) 

Farquhar,  A.  B.,  A.  B.  Farquhar  &  Co.,  New  York.     (Cuba.) 

Farrell,  James  A.,  President  U.  S.  Steel  Corporation,  New  York. 

Fisher,  Edmund  D.,  Banker,  City  Deputy  Controller,  New  York. 
(Honduras.) 

Flint,  Charles  R.,  25  Broad  Street,  New  York.     (Chile.) 

Flood,  Hon.  Henry  D.,  Member  of  Congress,  Virginia.     (Argentina.) 

Forgan,  J.  B.,  President  First  National  Bank,  Chicago.     (Brazil.) 


46  PAN   AMERICAN    FINANCIAL   CONFERENCE. 

Francis,  Hon.  David  R.,  Ex-Governor  of  Missouri.  St.  Louis. 
(Guatemala.) 

Fredrick,  Leopold,  165  Broadway,  New  York.     (Chile.) 

Fuerth,  Otto  H.,  60  Wall  Street,  New  York.     (Bolivia.) 

Fuller,  Paul,  New  York.     (Cuba.) 

Galliher,  W.  T.,  President  American  National  Bank,  Washington. 
(Honduras.) 

Gary,  Elbert  H.,  Chairman  Board,  U.  S.  Steel  Corporation,  New 
York.  (Argentina.) 

Given,  T.  H.,  President  Farmers'  Deposit  &  National  Bank, 
Pittsburg.  (Ecuador.) 

Goldstein,  L.  S.,  New  Orleans.     (Honduras.) 

Goodhue,  F.  A.,  Vice  President  First  National  Bank,  Boston. 
(Bolivia.) 

Goodwin,  Elliot  H.,  Secretary  U.  S.  Chamber  of  Commerce, 
Washington.  (Salvador.) 

Gorrell,  Frank  E.,  Secretary  National  Canners'  Association,  Wash- 
ington. (Colombia.) 

Grace,  Joseph  P.,  1  Hanover  Square,  New  York.     (Peru.) 

Green,  C.  A.,  Foreign  Department  R.  G.  Dun  &  Co.,  New  York. 
(Chile.) 

Grevstad,  Hon.  N>A.,  United  States  E.  E.  and  M.  P.  to  Uruguay  and 
Paraguay.  (Uruguay) 

Gregory,  Hon.  Thomas  Watt,  Attorney  General,  1532  Sixteenth 
Street,  Washington. 

Hamlin,  Hon.  Charles  S.,  Governor  Federal  Reserve  Board,  1515 
Massachusetts  Avenue,  Washington.  (Chile.) 

Hammond,  Hon.  John  Hays,  Engineer,  New  York. 

Harding,  Hon.  W.  P.  G.,  Member  Federal  Reserve  Board,  1855  Wyo- 
ming Avenue,  Washington.  (Peru.) 

Hardy,  Caldwell,  Banker,  Norfolk.     (Costa  Rica.) 

Harper,  Robert  N.,  President  District  National  Bank,  Washington. 
(Costa  Rica.) 

Harris,  A.  M.,  Harris,  Forbes  &  Co.,  New  York.     (Honduras.) 

Harris,  Hon.  William  J.,  Commissioner  Federal  Trade  Commission, 
2024  O  Street,  NW.,  Washington.  (Venezuela.) 

Hart,  Francis  R.,  Old  Colony  Trust  Co.,  Boston.     (Colombia.) 

Hastings,  S.  M.,  Illinois  Manufacturers'  Association,  Chicago.  (Bo- 
livia.) 

Hepburn,  A.  B.,  Chairman  of  Board,  Chase  National  Bank,  New 
York.  (Paraguay.) 

Hollander,  Prof.  J.  H.,  Johns  Hopkins  University,  Baltimore.  (Do- 
minican Republic.) 

Holliday,  John  H.,  President  Union  Trust  Co.,  Indianapolis.  (Bo- 
livia.) 

llorton,  Elias  Q.,  Otis  Elevator  Co.     (Brazil.) 


PROGRAM   AND   LIST   OF   QUESTIONS.  47 

Howard,  A.  B.,  Manager  South  American  Department  American 
Express  Company,  65  Broadway,  New  York.  (Panama.) 

Hurley,  Hon.  Edward  N.,  Federal  Trade  Commission,  Washington. 
(Bolivia.) 

Imhoff,  C.  H.,  Vice  President  Irving  National  Bank,  New  York. 
(Honduras.) 

Ingle,  William,  Chairman  Federal  Reserve  Bank,  1109  East  Main 
Street,  Richmond.  (Nicaragua.) 

Jaffray,   C.  T.,   Vice  President  First  National  Bank,  Minneapolis. 

Jay,  Pierre,  Chairman  Federal  Reserve  Bank,  62  Cedar  Street,  New 
York.  (Guatemala.) 

Johnson,  Alba  B.,  President  Baldwin  Locomotive  Works,  Philadel- 
.  phia.  (Chile.) 

Johnston,  Archibald,  First  Vice  President  Bethlehem  Steel  Cor- 
poration, 111  Broadway,  New  York.  (Chile.) 

Jones,  De  Witt  Clinton,  American  Dyewood  Co.,  80  Maiden  Lane, 
New  York.  (Honduras.) 

Jordan,  G.  G.,  Banker,  Columbus,  Ga.      (Dominican  Republic.) 

Joy,  Benjamin,  Cashier  National  Shawmut  Bank,  Boston.  (Argen- 
tina.) 

Keith,  Charles  S.,  Keith  &  Perry,  Kansas  City.     (Uruguay.) 

Kelly,  N.  B.,  General  Secretary  Chamber  of  Commerce,  Philadelphia. 
(Costa  Rica.) 

Kent,  Fred  I.,  Vice  President  Bankers  Trust  Co.,  New  York.  (Ecua- 
dor.) 

Kies,  W.  S.,  Foreign  Trade  Department  National  City  Bank,  New 
York.  (Brazil.) 

Kiler,  Charles  A.,  Champaign,  111.     (Costa  Rica.) 

Kretz,  George  H.,  National  Park  Bank,  New  York.     (Peru.) 

Lage,  Frederico,  Mechanics  &  Metals  National  Bank,  New  York. 
(Brazil.) 

Le  Gendre,  William  C.,  New  York.     (Uruguay.) 

Loeb,  William,  Jr.,  American  Smelting  &  Refining  Co.,  New  York. 
(Cuba.) 

Lyerly,  Charles  A.,  President  First  National  Bank,  Chattanooga. 
(Venezuela.) 

McChord,  Joseph  A.,  Governor  Federal  Reserve  Bank,  Hurt  Build- 
ing, Edgewood  Avenue  and  Exchange  Place,  Atlanta.  (Ecuador.) 

McCrosky,  Jas.  Warren,  J.  G.  White  &  Co.,  New  York.     (Honduras.) 

McQueen,  H.  C.,  Banker,  Wilmington,  N.  C.     (Salvador.) 

Maddox,  Robert  F.,  American  National  Bank,  Atlanta.     (Paraguay.) 

Malburn,  Hon.  Wm.  P.,  Assistant  Secretary  of  the  Treasury,  Wash- 
ington. (Guatemala.) 

Martin,  William  McC.,  Chairman  Federal  Reserve  Bank,  200  North 
Broadway,  St.  Louis.  (Paraguay.) 


48  PA3T   AMERICAN    FINANCIAL   CONFERENCE. 

Meeker,  Arthur,  Armour  Grain  Company,  208  South  La  Salle  Street. 
Chicago.  (Peru.) 

Meredith,  E.  T.,  Des  Monies,  Iowa.     (Colombia.) 

Miller,  Hon.  Adolph  C.,  Member  Federal  Reserve  Board,  1801  F 
Street,  Washington.  (Cuba.) 

Miller,  J.  Z.,  Jr.,  Chairman  Federal  Reserve  Bank,  R.  A.  Long  Build- 
ing, Tenth  Street  and  Grand  Avenue,  Kansas  City.  (Panama.) 

Minotto,  James,  Guaranty  Trust  Co.,  New  York.     (Guatemala.) 

Mitchell,  C.  D.,  President  Chattanooga  Plow  Co.,  Chattanooga. 
(Peru.) 

Moore,  Hon.  John  Bassett,  267  West  Seventy-third  Street,  New  York. 
(Brazil.) 

Morgan,  J.  P.,  15  Broad  Street,  New  York.     (Brazil.) 

Muchnic,  Charles,  Foreign  Sales  Department  American  Locomotive 
Co.,  30  Church  Street,  New  York.  (Colombia.) 

Newton,  Hon.  Byron  R.,  Assistant  Secretary  of  Treasury,  2610 
Garfield  Street,  Washington.  (Costa  Rica.) 

Nickerson,  J.  F.,  Vice  President  Chicago  Association  of  Commerce, 
Chicago.  (Salvador.) 

Norris,  George  W.,  Banker,  Philadelphia.     (Panama.) 

Norton,  Charles  D.,  First  National  Bank,  New  York.     (Chile.) 

Numsen,  Geo.  N.,  President  National  Canners'  Association,  Balti- 
more. (Nicaragua.) 

O'Brien,  Hon.  Edward  C.,  Ritz  Hotel,  New  York.     (Uruguay.) 

Olcott,  Hon.  J.  Van  Vechten,  President  Pan-American  States  Asso- 
ciation, Hotel  McAlpin,  Greeley  Square,  New  York.  (Paraguay.) 

O'Neil,  J.  F.,  President  Fulton  Iron  Works,  St.  Louis.     (Bolivia.) 

Osborn,  William  H.,  Commissioner  of  Internal  Revenue,  The  Wyo- 
ming, Washington. 

Osborne,  Hon.  John  E.,  First  Assistant  Secretary  of  State,  The 
Connecticut,  Washington. 

Owens,  Dr.  Clarence  J.,  Managing  Director  Southern  Commercial 
Congress,  Southern  Building,  Washington.  (Venezuela.) 

Paine,  A.  G.,  Jr.,  President  New  York  &  Pennsylvania  Co.,  New 
York. 

Parker,  Walter,  General  Manager  New  Orleans  Chamber  of  Commerce. 
(Nicaragua.) 

Parry,  Hon.  William  H.,  Commissioner  Federal  Trade  Commission, 
Avondale  Apartments,  1734  P  Street,  Washington.  (Ecuador.) 

Patchin,  Robert  H.,  National  Foreign  Trade  Council,  New  York. 
(Paraguay.) 

Penfield,  Walter  S.,  Lawyer,  Washington. 

Penny,  David  H.  G.,  Vice  President  Irving  National  Bank,  New 
York.  (Dominican  Republic.) 

Pepper,  Charles  M.,  Washington,  D.  C, 


PROGRAM   AND   LIST    OF   QUESTIONS.  49 

Perry,  Marsden  J.,  President  Union  Trust  Co.,  Providence.  (Gua- 
temala.) 

Peters,  Hon.  Andrew  J.,  Assistant  Secretary  of  the  Treasury,  Wash- 
ington. 

Phillips,  Hon.  William,  Third  Assistant  Secretary  of  State,  1535  L 
Street,  Washington. 

Pierson,  Lewis  E.,  President  Austin  Nichols  Co.,  New  York.  (Costa 
Rica.) 

Potter,  William  C.,  Guaranty  Trust  Co.,  New  York.     (Colombia.) 

Price,  Theodore  H.,  15  Wall  Street,  New  York.     (Venezuela.) 

Raskob,  John  J.,  Treasurer  E.  I.  du  Pont  de  Nemours  Powder  Co., 
Wilmington,  Del.  (Chile.) 

Redfield,  Hon.  William  Cox,  Secretary  of  Commerce,  The  Highlands, 
Washington. 

Reynolds,  Geo.  M.,  Commercial  &  Continental  National  Bank, 
Chicago.  (Peru.) 

Reynolds,  Hon.  James  B.,  National  Association  of  Cotton  Manufac- 
turers, 602  Wilkins  Building,  Washington.  (Panama.) 

Rhett,  R.  G.,  Banker,  Charleston,  S.  C.     (Dominican  Republic.) 

Rhoads,  Charles  J.,  Governor  Federal  Reserve  Bank,  408  Chestnut 
Street,  Philadelphia.  (Cuba.) 

Rice,  E.  W.,  Jr.,  President  General  Electric  Co.,  New  York.     (Brazil.) 

Rich,  John  H.,  Minneapolis,  Minn.     (Costa  Rica.) 

Richards,  George  H.,  Foreign  Department  Remington  Typewriter 
Co.,  327  Broadway,  New  York.  (Bolivia.) 

Rossell,  John  S.,  Vice  President  Security  Trust  &  Safe  Deposit  Co., 
Wilmington,  Del.  (Nicaragua.) 

Rovensky,  J.  E.,  National  Bank  of  Commerce,  New  York.  (Uru- 
guay.) 

Rowe,  W.  S.,  President  First  National  Bank  Cincinnati.     (Salvador.) 

Rublee,  Hon.  George,  Commissioner  Federal  Trade  Commission, 
1105  Sixteenth  Street,  Washington.  (Uruguay.) 

Ryan,  John  D.,  President  Amalgamated  Copper  Co.,  New  York. 
(Chile.) 

Ruperti,  J.,  Amsinck  &  Co.,  6  Hanover  Square,  New  York.  (Gua- 
temala.) 

Sachs,  Samuel,  Goldman,  Sachs  &  Co.,  60  Wall  Street,  New  York, 
(Venezuela.) 

Saunders,  W.  L.,  Ingersoll,  Rand  Co.,  New  York.  (Dominican 
Republic.) 

Schiff,  Mortimer  L.,  Kuhn,  Loeb  &  Co.,  New  York.     (Argentina.) 

Schmidt,  George  P.,  Schmidt  &  Gallatin,  New  York.     (Argentina.) 

Schoonmaker,  S.  L.,  Chairman  Board  of  American  Locomotive  Co., 
New  York.  (Argentina.) 

98257°— 15 4 


50  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

Seligman,  Isaac  N.,  J.  W.  Seligman  &  Co.,  2  William  Street,  New 
York. 

Shapleigh,  A.  L.,  President  Commercial  Club,  St.  Louis.     (Guatemala.) 

Sherrill,  Charles  H.,  30  Broad  Street,  New  York.     (Argentina.) 

Shirley,  James  J.,  T.  A.  Gillespie  Co.,  50  Church  Street,  New  York. 
(Uruguay.) 

Simmons,  W.  D.,  425  Arch  Street,  Philadelphia.     (Colombia.) 

Smith,  Charles  E.  W.,  42  Broadway,  New  York.     (Argentina.) 

Speyer,  James,  Speyer  &  Co.,  New  York.     (Bolivia.) 

Storrow,  James,  Lee,  Higginson  &  Co.,  Boston.     (Bolivia.) 

Straight,  Willard,  J.  P.  Morgan  &  Co.,  New  York.     (Colombia.) 

Strong,  Benjamin,  Jr.,  Governor  Federal  Reserve  Bank,  62  Cedar 
Street,  New  York.  (Honduras.) 

Sulzberger,  G.  F.,  Sulzberger  &  Sons  Co.,  Forty-fifth  Street  and 
First  Avenue,  New  York.  (Argentina.) 

Sutter,  Charles  S.,  Chairman  Executive  Committee  of  Foreign  Trade 
Bureau  for  the  Business  Men's  League  of  St.  Louis,  St.  Louis. 
(Brazil.) 

Swiggett,  Dr.  Glen  L.,  Pan-American  Union,  Washington.  (Guate- 
mala.) 

Tedcastle,  A.  W.,  89  Beach  Street,  Boston.     (Ecuador.) 

Thomas,  E.  P.,  President  U.  S.  Steel  Products  Co.,  New  York. 
(Brazil.) 

Thompson,  Hon.  Arthur,  Member  of  the  Nicaraguan  Mixed  Claims 
Commission,  Woodward  Building,  Washington.  (Nicaragua.) 

Toby,  George  P.,  A.  B.  Leach  &  Co.,  New  York  (vice  A.  B.  Leach). 
(Honduras.) 

Townley,  Calvert,  Westinghouse  Electric  &  Manufacturing  Co., 
East  Pittsburgh.  (Uruguay.) 

Travieso,  Hon.  Martin,  Treasurer  of  Porto  Rico.     (Ecuador.) 

Untermyer,  Samuel,  Lawyer,  New  York. 

VanderHp,  Frank  A.,  President  National  City  Bank,  New  York. 
(Argentina.) 

Wade,  F.  J.,  Banker,  St.  Louis.     (Panama.) 

Warburg,  Hon.  Paul  M.,  Member  Federal  Reserve  Board,  1704 
Eighteenth  Street,  Washington.  (Brazil.) 

Warden,  Charles  W.',  First  Vice  President  Continental  Trust  Co., 
Washington.  (Guatemala.) 

Warfield,  Edwin,  President  Fidelity  Trust  Co.,  Baltimore.  (Do- 
minican Republic.) 

Warren,  Charles  B.,  President  Board  of  Commerce,  Detroit.  (Vene- 
zuela.) 

Wells,  Rolla,  Governor  Federal  Reserve  Bank,  300  North  Broadway, 
St.  Louis.  (Paraguay.) 


PROGRAM   AND   LIST   OF   QUESTIONS.  51 

Wexler,  Sol ,  President  Whitney-Central  National  Bank,  New  Orleans. 

(Nicaragua.) 
Wheeler,    Harry   A.,    Vice    President    Union    Trust   Co.,    Chicago. 

(Uruguay.) 

White,  J.  G.,  President  J.  G.  White  &  Co.,  New  York.     (Argentina.) 
Wiggin,  A.  H.,  Chase  National  Bank,  New  York.     (Ecuador.) 
Williams,  Hon.  John  Skelton,  Comptroller  of  the  Currency,  1712  H 

Street  NW.,  Washington. 
Williams,  R.  Lancaster,  Middendorf,   Williams  &  Co.,   Baltimore. 

(Venezuela.) 

Willis,  H.  Parker,  Secretary  Federal  Reserve  Board,  Washington. 
Wilson,  Hon.  William  Bauchop,  Secretary  of  Labor,  1600  T  Street 

NW.,  Washington. 
Wilson,   Dr.   W.   P.,   Director   Commercial  Museum,   Philadelphia. 

(Salvador.) 

Wing,  Daniel  G.,  President  First  National  Bank,  Boston.     (Brazil.) 
Wood,   Edward  Randolph,   Vice  President  Philadelphia  Board  of 

Trade,  Philadelphia.     (Nicaragua.) 

Woolley,  Hon.  Robert  W.,  Director  of  the  Mint,  Washington. 
Yanes,    Francisco    J.,    Assistant    Director    General    Pan-American 

Union,  Washington.     (Venezuela.) 


ARGENTINA. 

CONFERENCE  COMMITTEE. 

Chairman.     • 
HON.  SAMUEL  HALE  PEARSON. 

Official  Delegation. 

HON.  SAMUEL  HALE  PEARSON. 
HON.  KICARDO  C.  ALDAO. 

V.    VlLLAMIL.* 


Special  Guest  of  the  Secretary  of  the  Treasury. 
His  EXCELLENCY  THE  ARGENTINE  AMBASSADOR. 

Representatives  from  the  United  States. 

Delano,  Hon.  F.  A.,  Vice-Go  vernor  Federal  Reserve  Board,  Wash- 

ington. 

Flood,  Hon.  Henry  D.,  Member  of  Congress,  Appomattox,  Va. 
Gary,  Elbert  H.,  U.  S.  Steel  Corporation,  New  York. 
Joy,  Benjamin,  National  Shawmut  Bank,  Boston. 
Schiff,  Mortimer  L.,  Kuhn,  Loeb  &  Co.,  New  York. 
Schmidt,  George  P.,  Schmidt  &  Gallatin,  New  York. 
Schoonmaker,  S.  L.,  American  Locomotive  Co.,  New  York. 
Sherrill,  Hon.  Charles  H.,  New  York. 
Smith,  Charles  E.  W.,  New  York. 
Sulzberger,  G.  F.,  Sulzberger  &  Sons  Co.,  New  York. 
Vanderlip,  Frank  A.,  President  National  City  Bank,  New  York. 
White,  J.  G.,  J.  G.  White  &  Co.,  New  York. 

J.  de  Jara  Almonte,  Group  Secretary. 

*  Dr.  Villamil  and  Mr.   John  E.  Zimmermann  attended  the  conference  as  representa- 
tives of  the  Buenos  Aires  Chamber  of  Commerce. 

52 


BOLIVIA. 

CONFERENCE  COMMITTEE. 

Chairman. 
HON.  IGNACIO  CALDERON. 

Official  Delegation. 

HON.  IGNACIO  CALDERON. 
HON.  ADOLFO  BALLIVIAN. 

Special  Guest  of  the  Secretary  of  the  Treasury. 

THE  ENVOY  EXTRAORDINARY  AND  MINISTER  PLENIPOTENTIARY  OF 

BOLIVIA. 

Representatives  from  the  United  States. 

Hurley,  Hon.  Edward  N.,  Federal  Trade  Commission,  Washington. 
Bippus,  W.  F.,  Treasurer  National  Cash  Register  Co.,  Dayton,  Ohio. 
Elliott,  Hon.  Milton  C.,  Counsel  Federal  Reserve  Board,  Washington. 
Fuerth,  Otto  H.,  New  York. 

Goodhue,  F.  A.,  Vice  President  First  National  Bank,  Boston. 
Hastings,  S.  M.,  Illinois  Manufacturers'  Association,  Chicago. 
Holliday,  John  H.,  President  Union  Trust  Co.,  Indianapolis. 
O'Neil,  J.  F.,  President  Fulton  Iron  Works,  St.  Louis. 
Richards,  George  H.7  Remington  Typewriter  Co.,  New  York. 
Speyer,  James,  Speyer  &  Co.,  New  York. 
Storrow,  James  J.,  Boston. 

J.  C.  Luitweiler,  Group  Secretary. 

53 


BRAZIL. 

CONFERENCE  COMMITTEE. 

Oliairman. 
HON.  AMARO  CAVALCANTI. 

Official  Delegation. 

HON.  AMARO  CAVALCANTI.* 
Secretary  of  Delegation:  SENHOR  JOAQUIM  PECEJO. 

Special  Guest  of  the  Secretary  of  the  Treasury. 
His  EXCELLENCY  THE  BRAZILIAN  AMBASSADOR. 

Representatives  from  the  United  States. 

Warburg,  Hon.  Paul  M.,  Federal  Reserve  Board,  Washington. 
Cone,  Caesar,  Greensboro,  N.  C. 

Forgan,  J.  B.,  President  First  National  Bank,  Chicago. 
Horton,  Elias  Q.,  Otis  Elevator  Co. 
Lage,  Frederic,  New  York. 
Kies,  W.  S.,  New  York. 
Moore,  Hon.  John  Bassett,  New  York. 
Morgan,  J.  P.,  J.  P.  Morgan  &  Co.,  New  York. 
Rice,  E.  W.,  President  General  Electric  Co.,  New  York. 
Sutter,  Charles  S.,  St.  Louis. 

Thomas,  E.  P.,  President  United  States  Steel  Products  Co.,  New  York. 
Wing,  Daniel  G.,  President  First  National  Bank,  Boston. 
Charles  Ray  Dean,  Group  Secretary. 

*  Representing  also  the  International  Chamber  of  Commerce  of  Brazil. 
54 


CHILE. 

CONFERENCE  COMMITTEE. 
Chairman. 

HON.    LUIS   IZQUIERDO. 

Official  Delegation. 

HON.  Luis  IZQUIERDO. 

HON.  AUGUSTO  VlLLANUEVA. 

HON.  GONZALO  VERGARA  BULNES. 

Special  Guest  of  the  Secretary  of  the  Treasury. 
His  EXCELLENCY  THE  AMBASSADOR  OF  CHILE. 

Representatives  from  the  United  States. 

Hamlin,  Hon.  Charles  S.,  Governor  Federal  Reserve  Board,  Wash- 
ington. 

Eaton,  Frederick  H.,  President  American  Power  &  Foundry  Co., 
New  York. 

Flint,  Charles  R.,  New  York. 

Fredrick,  Leopold,  New  York. 

Green,  C.  A.,  R.  G.  Dun  &  Co. 

Johnson,  Alba  B.,   President  Baldwin  Locomotive   Works,   Phila- 
delphia. 

Johnston,  Archibald,  First  Vice  President  Bethlehem  Steel  Corpo- 
ration, New  York. 

Norton,  Charles  D.,  First  National  Bank,  New  York. 

Roskob,  John  J.,  Treasurer  E.  I.  du  Pont  de  Nemours  Powder  Co. 

Ryan,  John  D.,  President  Amalgamated  Copper  Co.,  New  York. 
S.  Martinez  de  Alva,  Group  Secretary. 

55 


COLOMBIA. 

CONFERENCE  COMMITTEE. 

Chairman. 
HON.  SANTIAGO  PEREZ  TRIANA. 

Official  Delegation. 

HON.  SANTIAGO  PEREZ  TRIANA. 
HON.  ROBERTO  ANCIZAR. 

Secretary  of  Delegation,  SENOR  GABRIEL  LLOPIO. 
Special  Guest  of  the  Secretary  of  the  Treasury. 

THE  ENVOY  EXTRAORDINARY  AND  MINISTER  PLENIPOTENTIARY  OF 

COLOMBIA. 

Representatives  from  the  United  States. 

Davies,  Hon.  Jos.  E.,  Chairman  Federal  Trade  Commission,  Wash- 
ington. 

Gorrell,  Frank  E.,  Secretary  National  Canners'  Association,  Wash- 
ington. 

Hart,  Francis  R.,  Old  Colony  Trust  Co.,  Boston. 

Meredith,  E.  T.,  Des  Moines,  Iowa. 

Muchnic,   Charles,   Manager  Foreign  Sales  Department,   American 
Locomotive  Co.,  New  York. 

Potter,  W.  C.,  Guaranty  Trust  Co.,  New  York. 

Simmons,  W.  D.,  Simmons  Hardware  Co.,  Philadelphia. 

Straight,  Willard,  J.  P.  Morgan  &  Co.,  New  York. 

J.  A.  Duiiaway,  Group  Secretary. 
56 


COSTA  RICA. 

CONFERENCE  COMMITTEE. 

Chairman. 
HON.  MARIANO  GUARDIA  CARAZO. 

Official  Delegation. 

HON.  MARIANO  GUARDIA  CARAZO. 
HON.  JOHN  M.  KEITH. 

Special  Guest  of  the  Secretary  of  the  Treasury. 

THE  ENVOY  EXTRAORDINARY  AND  MINISTER  PLENIPOTENTIARY  OF 

COSTA  RICA. 

Representatives  from  the    United  States. 

Newton,  Hon.  Byron  R.,  Assistant  Secretary,  Treasury  Department, 

Washington. 

Aerts,  G.  A.,  Export  Manager  Rudolph.  Wurlitzer  Co.,  Cincinnati. 
Brand,  Charles  J.,  Department  of  Agriculture, 
de  Lima,  E.  A.,  58  West  Eighth  Street,  New  York. 
Hardy,  Caldwell,  Norfolk,  Va. 

Harper,  R.  N.,  President  District  National  Bank,  Washington. 
Kelly,  N.  B.,  General  Secretary  Chamber  of  Commerce,  Philadelphia. 
Kiler,  Charles  A.,  Champaign,  111. 

Pierson,  Lewis  E.,  President  Austin  Nichols  Co.,  New  York. 
Rich,  John  H.,  Minneapolis. 

Theo.  G.  Lurman,  Jr.,  Group  Secretary. 

57 


CUBA.. 

CONFEEENCE  COMMITTEE. 

Chairman. 
HON.  PABLO  DESVERNINE  Y  GALDOS. 

Official  Delegation. 

HON.  PABLO  DESVERNINE  Y  GALDOS. 
HON.  PORFIRIO  FRANCA  Y  ALVAREZ  DE  LA  CAMPA. 
HON.  OCTAVIO  ZAYAS  Y  ADAN. 

Secretary  of  Delegation,  SENOR  JUAN  A.  SOLBERG. 

Special  Guest  of  the  Secretary  of  the  Treasury. 
THE  ENVOY  EXTRAORDINARY  AND  MINISTER  PLENIPOTENTIARY  CUBA, 

Representatives  from  the  United  States. 

Miller,  Hon.  Adolph  C.,  Federal  Reserve  Board,  Washington. 

Brown,  F.  Q.,  Redmond  &  Co.,  New  York. 

Conant,  Charles  A.,  New  York. 

Esberg,  A.  I.,  New  York. 

Farquhar,  A.  B.,  A.  B.  Farquhar  &  Co.,  New  York. 

Fuller,  Paul,  New  York. 

Loeb,  Wm.,  jr.,  American  Smelting  &  Refining  Co.,  New  York. 

Rhoads,  Charles  J.,  Governor  Federal  Reserve  Bank,  Philadelphia. 

C.  H.  Crennan,  Group  Secretary. 
58 


DOMINICAN  REPUBLIC. 

CONFERENCE  COMMITTEE. 

OTiairman. 
HON.  FRANCISCO  J.  PEYNADO. 

Official  Delegation. 

HON.  FRANCISCO  J.  PEYNADO. 
HON.  ENRIQUE  JIMENEZ. 

Special  Guest  of  the  Secretary  of  the  Treasury. 

THE  ENVOY  EXTRAORDINARY  AND  MINISTER  PLENIPOTENTIARY  OF 
THE  DOMINICAN  REPUBLIC. 

Representatives  from  the  United  States. 

Fancher,  E.  R.,  Governor  Federal  Reserve  Bank,  Cleveland. 
Emerson,  Guy,  New  York. 

Falconer,  Charles  E.,  President  Merchants  &  Manufacturers'  Asso- 
ciation, Baltimore. 

Hollander,  Prof.  J.  H.,  Johns  Hopkins  University,  Baltimore. 
Jordan,  G.  G.,  Columbus. 

Penny,  David  H.  G.,  Vice  President  Irving  National  Bank,  New  York. 
Pepper,  Charles  M.,  Washington. 
Rhett,  R.  G.,  Charleston,  S.  C. 
Saunders,  W.  L.,  Ingersoll,  Rand  Co.,  New  York. 
Warfield,  Edwin,  Baltimore. 

Dr.  G.  A.  Sherwell,  Group  Secretary. 

59 


ECUADOR. 

CONFERENCE  COMMITTEE. 

Chairman. 
HON.  JUAN  CUEVA  GARCIA. 

Official  Delegation. 

HON.  JUAN  CUEVA  GARCIA. 

HON.  VICENTE  GONZALES  B. 

HON.  ENRIQUE  GALLARDO. 

Special  Guest  of  the  Secretary  of  the  Treasury. 

THE  ENVOY  EXTRAORDINARY  AND  MINISTER  PLENIPOTENTIARY  OP 

ECUADOR. 

Representatives  from  the  United  States. 

Parry,  Hon.  Will  H.,  Federal  Trade  Commission,  Washington. 
Clausen,  John,  Crocker  National  Bank,  San  Francisco. 
Conklin,  Franklin,  Newark,  N.  J. 

Given,  T.  H.,  President  Farmers'  Deposit  &  National  Bank. 
Kent,  Fred  I.,  Vice  President  Bankers'  Trust  Co.,  New  York. 
McChord,  Joseph  A.,  Governor  Federal  Reserve  Bank,  Atlanta. 
Tedcastle,  A.  W.,  Boston. 

Travieso,  Hon.  Martin,  Treasurer  of  Porto  Rico. 
Wiggin,  A.  H.,  Chase  National  Bank,  New  York. 
Charles  F.  Baker,  Group  Secretary. 
60 


GUATEMALA. 

CONFERENCE  COMMITTEE. 

Chairman. 
HON.  VICTOR  SANCHEZ  OCANA. 

Official  Delegation. 

HON.  VICTOR  SANCHEZ  OCANA. 

HON.  CARLOS  HERRERA. 

HON.  JUAN  S.  LARA. 

Secretary  of  Delegation,  Lie.  VIBGILIO  KODRIGUEZ  BETETA. 
Special  Guest  of  the  Secretary  oftlie  Treasury. 

The  ENVOY  EXTRAORDINARY  AND  MINISTER  PLENIPOTENTIARY  OF 

GUATEMALA. 

Representatives  from  the  United  States. 

Malburn,  Hon.  Win.  P.,  Assistant  Secretary,  Treasury  Department, 

Washington. 
Francis,  Hon.  David  R. 

Jay,  Pierre,  Chan-man  Federal  Reserve  Bank,  New  York. 
Minotto,  James,  Guaranty  Trust  Co.,  New  York. 
Perry,  Marsden  J.,  Providence. 
Ruperti,  J.,  G.  Amsinck  &  Co.,  New  York. 
Shapleigh,  A.  L.,  President  Commercial  Club,  St.  Louis. 
Swiggett,  Dr.  Glen  L.,  Pan-American  Union,  Washington. 
Warden,  Charles  W.,  First  Vice  President  Continental  Trust  Co., 

Washington. 

H.  N.  Branch,  Group  Secretary. 

61 


HONDURAS. 

CONFERENCE  COMMITTEE. 

Chairman. 
HON.  LEOPOLDO  CORDOVA. 

Official  Delegation. 

HON.  LEOPOLDO  CORDOVA. 
HON.  DANIEL  FORTIN. 

Special  Guest  of  the  Secretary  of  the  Treasury. 

THE  ENVOY  EXTRAORDINARY  AND  MINISTER  PLENIPOTENTIARY  OF 

HONDURAS. 

Representatives  from  the  United  States. 

Strong,  Benjamin,  Jr.,  Governor  Federal  Reserve  Bank,  New  York. 
DeLanoy,   William  C.;   Director   Bureau  of   War  Risk  Insurance, 

Treasury  Department,  Washington. 
Fisher,  Edmund  D.,  City  Deputy  Comptroller,  New  York. 
Galliher,  W.  T.,  President  American  National  Bank,  Washington. 
Goldstein,  L.  S.,  New  Orleans. 
Harris,  A.  M.,  Harris,  Forbes  &  Co.,  New  York. 
Imhoff,  C.  H.,  Vice  President  Irving  National  Bank,  New  York. 
Jones,  De  Witt  Clinton,  American  Dyewood  Co.,  New  York. 
McCrosky,  James  Warren,  J.  G.  White  &  Co.,  New  York. 
Toby,  Geo.  P.,  A.  B.  Leach  &  Co.,  New  York. 

Esteban  S.  Garcia,  Group  Secretary. 
62 


NICARAGUA. 

CONFERENCE  COMMITTEE. 

Ohairman.     • 
HON.  PEDRO  RAFAEL  CUADBA. 

Official  Delegation. 

HON.  PEDRO  RAFAEL  CUADRA. 
HON.  ALBERT  STRAUSS. 
HON.  CLIFFORD  D.  HAM. 

Special  Guest  of  the  Secretary  of  the  Treasury. 

THE  ENVOY  EXTRAORDINARY  AND  MINISTER  PLENIPOTENTIARY  OF 

NICARAGUA. 

Representatives  from  the  United  States. 

Ingle,  Wm.,  Chairman  Federal  Reserve  Bank,  Richmond. 

Austin,  Richard  L.,  Chairman  Federal  Reserve  Bank,  Philadelphia. 

Brown,  James,  Brown  Bros.  &  Co.,  New  York. 

Numsen,  George  N.,  President  National  Canners'  Association,  Balti- 
more. 

Parker,  Walter,  Manager  New  Orleans  Chamber  of  Commerce. 

Rossell,  John  S.,  Vice  President  Security  Trust  &  Safe  Deposit  Co., 
Wilmington,  Del. 

Thompson,  Hon.  Arthur,  Woodward  Building,  Washington. 

Wexler,  Sol,  President  Whitney-Central  National  Bank,  New  Orleans. 

Wood,  E.  R.,  Vice  President  Board  of  Trade,  Philadelphia. 
A.  Gonzalez-Lamas,  Group  Secretary. 

63 


PANAMA. 

CONFERENCE  COMMITTEE. 

Chairman. 

HON.  ARISTIDES  ARJONA. 
Official  Delegation. 

HON.  ARISTIDES  ARJONA. 
HON.  RAMON  F.  ACEVEDO. 
HON.  RAMON  ARIAS,  JR. 

Secretary  of  Delegation,  SENOR  W.  R.  WILFORD. 
Special  Guest  of  the  Secretary  of  tlie  Treasury. 

THE  ENVOY  EXTRAORDINARY  AND  MINISTER  PLENIPOTENTIARY  OF 

PANAMA. 

Representatives  from  the  United  States. 

Miller,  J.  Z.,  Jr.,  Chairman  Federal  Reserve  Bank,  Kansas  City. 
Clapham,  A.  G.,  President  Commercial  National  Bank,  Washington. 
Coolidge,  J.  Randolph,  Boston. 
Crane,  Charles  R.,  Chicago. 

Howard,  A.  B.,  American  Express  Co.,  Washington. 
Norris,  George  W.,  Philadelphia. 

Reynolds,  Hon.  James  B.,  National  Association  of  Cotton  Manufac- 
turers, Washington. 
Wade,  F.  J.,  St.  Louis. 

Walter  S.  Penfield,  Group  Secretary. 
64 


PARAGUAY. 

CONFERENCE  COMMITTEE. 

Chairman. 
HON.  HECTOR  VELAZQUEZ. 

Official  Delegation. 

HON.  HECTOR  VELAZQUEZ. 
HON.  WILLIAM  WALLACE  WHITE. 

Special  Guest  of  the  Secretary  of  the  Treasury. 

THE  ENVOY  EXTRAORDINARY  AND  MINISTER  PLENIPOTENTIARY  OF 

PARAGUAY. 

Representatives  from  the  United  States. 

Wells,  Holla,  Governor  Federal  Reserve  Bank,  St.  Louis. 

Boyd,  L.  C.,  Indianapolis. 

de  Navarro,  Alfonso,  Vice  President  Atlas  Portland  Cement  Co., 
New  York. 

Erskine,  A.  R.,  South  Bend,  Ind. 

Fahey,  John  H.,  President  U.  S.  Chamber  of  Commerce,  Boston,  Mass. 

Hepburn,  A.  B.,  Chase  National  Bank,  New  York. 

Maddox,  Robert  F.,  American  National  Bank,  Atlanta. 

Martin,  Wm.  McC.,  Chairman  Federal  Reserve  Bank,  St.  Louis. 

Olcott,  Hon.  J.  Van  Vechten,  President  Pan-American  States  Asso- 
ciation, New  York. 

Patchin,  Robert  H.,  New  York. 

Harold  Clarkson,  Group  Secretary. 

65 
98257°— 15 5 


PERU. 

CONFERENCE  COMMITTEE. 

Chairman. 
HON.  ISAAC  ALZAMORA. 

Official  Delegation. 

HON.  ISAAC  ALZAMORA. 
HON.  EDUARDO  HIGGINSON. 

Special  Guest  of  the  Secretary  of  the  Treasury. 

THE    ENVOY    EXTRAORDINARY    AND    MINISTER    PLENIPOTENTIARY 

OF  PERU. 

Representatives  from  the  United  States. 

Harding,  Hon.  W.  P.  G.,  Federal  Keserve  Board,  Washington. 
Allen,  F.  W.,  Old  Colony  Trust  Co.,  Boston. 
Arnold,  J.  J.,  First  National  Bank,  Chicago. 
Babson,  Roger  W.,  Boston. 
Douglas,  Wm.  H.,  New  York. 
Duval,  G.  L.,  Wessell  Duval  &  Co.,  New  York. 
Fairchild,  Samuel  W.,  Fairchild  Bros.  &  Foster,  New  York. 
Grace,  Joseph  P.,  New  York. 

Kretz,  George  H.,  National  Park  Bank,  New  York. 
Meeker,  Arthur,  Armour  Grain  Co.,  Chicago. 
Mitchell,  C.  D.,  President  Chattanooga  Plow  Co.,  Chattanooga. 
Reynolds,    Geo.    M.,    Commercial    &    Continental    National    Bank, 
Chicago. 

Dr.  Harry  Erwin  Bard,  Group  Secretary. 


SALVADOR. 

CONFERENCE  COMMITTEE. 

Chairman. 
HON.  ALFONSO  QUINONEZ  M. 

Official  Delegation. 

HON.  ALFONSO  QUINONEZ  M. 

HON.  JOSE  E.  SUAY. 
HON.  ROBERTO  AGUILAR. 

Special  Guest  of  the  Secretary  of  the  Treasury. 

THE  ENVOY  EXTRAORDINARY  AND  MINISTER  PLENIPOTENTIARY  OF 

SALVADOR. 

Representatives  from  the  United  States. 

Burke,  Hon.  John,  Treasurer  of  the  United  States.    • 

Ardrey,  J.  Howard,  City  National  Bank,  Dallas,  Texas. 

Curtiss,  Frederic  R.,  Chairman  Federal  Reserve  Bank,  Boston. 

Deans,  H.  G.  P.,  Merchants'  Loan  &  Trust  Co.,  Chicago. 

Goodwin,  Elliot  H.,  Secretary  United  States  Chamber  of  Commerce, 

Washington. 

McQueen,  H.  C.,  Wilmington,  N.  C. 

Nickerson,  J.  F.,  Vice  President  Association  of  Commerce,  Chicago. 
Rowe,  W.  S.,  President  First  National  Bank,  Cincinnati. 
Wilson,  Dr.  W.  P.,  Director  Commercial  Museum,  Philadelphia. 
Constantine  E.  McGuire,  Group  Secretary. 

67 


URUGUAY. 

CONFERENCE  COMMITTEE. 

Chairman. 

HON.  PEDRO  Cosio. 

Official  Delegation. 

HON.  PEDRO  Cosio. 

HON.  GABRIEL  TERRA. 

HON.  CARLOS  MARIA  DE  PEN  A. 

Secretary  of  Delegation,  SENOK  JOSE  RICHLING. 
Special  Guest  of  the  Secretary  of  the  Treasury. 

THE  ENVOY  EXTRAORDINARY  AND  MINISTER  PLENIPOTENTIARY  OF 

URUGUAY. 

Representatives  from  the  United  States. 

Rublee,  Hon.  George,  Federal  Trade  Commission,  Washington. 

Bixby,  William  K.,  American  Car  &  Foundry  Co.,  St.  Louis. 

Butterworth,  William,  President  Deere  &  Co.,  Moline,  111. 

Eldridge,  H.  R.,  Vice  President  National  City  Bank,  New  York. 

Grevstad,  Hon.  N.  A.,  U.  S.  E.  E.  &  M.  P.  to  Paraguay  and  Uruguay. 

Keith,  Charles  S.,  Keith  &  Perry,  Kansas  City. 

Le  Gendre,  William  C.,  New  York. 

O'Brien,  Edw.  C.,  New  York. 

Rovensky,  J.  F.,  National  Bank  of  Commerce,  New  York. 

ShMey,  James  J.,  T.  A.  Gillespie  Co.,  New  York. 

Townley,  Calvert,  Westinghouse  Electric  &  Mfg.  Co.,  East  Pittsburgh. 

Wheeler,  Harry  A.,  Vice  President  Union  Trust  Co.,  Chicago. 

Genaro  Silva  Rodriguez,  Group  Secretary. 
68 


VENEZUELA. 

CONFERENCE  COMMITTEE. 

Chairman. 
HON.  PEDRO  RAFAEL  RINCONES. 

Official  Delegation. 
HON.  PEDRO  RAFAEL  RINCONES. 
Special  Guest  of  the  Secretary  of  the  Treasury. 

THE  ENVOY  EXTRAORDINARY  AND  MINISTER  PLENIPOTENTIARY  OF 

VENEZUELA. 

Representatives  from  the  United  States. 

Harris,  Hon.  William  J.,  Federal  Trade  Commission,  Washington. 
Cornell,  Charles  L.,  Treasurer  Niles-Bement-Pond  Co.,  New  York. 
Edson,  John  Joy,  Washington  Loan  &  Trust  Co.,  Washington. 
Lyerly,  Charles  A.,  President  First  National  Bank,  Chattanooga. 
Owens,  Dr.  Clarence  J.,  Southern  Commercial  Congress,  Washington 
Price,  Theodore  H.,  New  York. 
Sachs,  Samuel,  Goldman,  Sachs  &  Co.,  New  York. 
Warren,  Charles  B.,  President  Board  of  Commerce,  Detroit. 
Williams,  R.  Lancaster,  Middendorf,  Williams  &  Co.,  Baltimore. 
Yanes,  Francisco  J.,  Assistant  Director  Pan-American  Union,  Wash- 
ington. 

H.  Ralph  Ringe,  Group  Secretary. 


GENERAL  COMMITTEE  ON  UNIFORMITY  OF  LAWS  RELATING 
TO  TRADE  COMMERCE  AND  INTERNATIONAL  COMMER- 
CIAL COURT. 

Chairman,  Hon.  WILLIAM  C.  REDFIELD. 

Senor  Dr.  Samuel  Hale  Pearson. __  .Argentina. 

Senor  Dr.  Ignacio  Calder6n  _ Bolivia. 

Senhor  Dr.  Amaro  Cavalcanti Brazil. 

Senor  Dr.  Luis  Izquierdo Chile. 

Senor  Dr.  Santiago  Perez  Triana _ -Colombia. 

Senor  Dr.  Roberto  Anoizar  _ Colombia. 

Senor  Dr.  John  M.  Keith Costa  Rica. 

Senor  Dr.  Pablo  Desvernine  y  Galdos Cuba. 

Senor  Dr.  Francisco  J.  Peynado Dominican  Republic. 

Senor  Dr.  Vicente  Gonzales  B Ecuador. 

Senor  Dr.  Juan  S.  Lara _  _ Guatemala. 

Senor  Dr.  Leopoldo  C6rdova Honduras. 

Senor  Dr.  Pedro  Rafael  Cuadra_  _ '_ .Nicaragua. 

Senor  Dr.  Ram6n  F.  Acevedo Panama. 

Senor  Dr.  William  Wallace  White Paraguay. 

Senor  Dr.  Isaac  Alzamora.  _ Peru. 

Senor  Dr.  Alfonso  Quinonez  M Salvador. 

Senor  Dr.  Carlos  Maria  de  Pena _ .Uruguay. 

Senor  Dr.  Pedro  Rafael  Rincones Venezuela. 

MEMBERS  REPRESENTING  THE  UNITED  STATES. 

The  Honorable  Charles  S.  Hamlin. 

The  Honorable  John  Barrett. 

The  Honorable  Charles  A.  Conant. 

The  Honorable  D.  R.  Francis. 

The  Honorable  John  Hays  Hammond. 

The  Honorable  John  Bassett  Moore. 

The  Honorable  Robert  W.  Woolley. 

Mr.  George  H.  Numsen. 

Mr.  W.  L.  Saunders. 

M.  Willard  Straight. 

Mr.  Benjamin  Strong,  Jr. 

Mr.  Samuel  Untermyer. 

Claud  De  Baun,  Secretary. 
70 


GENERAL    COMMITTEE    ON    TRANSPORTATION    AND    COM- 
MUNICATION. 

ARGENTINE  DELEGATION: 

Senor  Dr.  Samuel  Hale  Pearson. 
Seiior  Dr.  Bicardo  C.  Aldao. 
Senor  Dr.  V.  ViUamil. 
Senor  John  E.  Zimmermann. 

BRAZILIAN  DELEGATION: 

Senhor  Dr.  Amaro  Cavalcanti. 

CHILEAN  DELEGATION: 

Senor  Dr.  Luis  Izquierdo. 
Senor  Dr.  Augusto  Villanueva. 
Senor  Dr.  Gonzalo  Vergara  Bulnes. 

ECUADOREAN    DELEGATION: 

Seiior  Dr.  Vicente  Gonzales  B. 

PERUVIAN  DELEGATION: 

Seiior  Dr.  Isaac  Alzamora. 
Senor  Dr.  Eduardo  Higginson. 

URUGUAYAN  DELEGATION: 
Senor  Dr.  Pedro  Cosio. 
Senor  Dr.  Gabriel  Terra. 
Senor  Dr.  Carlos  Maria  de  Pena. 

REPRESENTATIVES  OF  THE  UNITED  STATES: 
The  Honorable  D.  R.  Francis. 
The  Honorable  Edward  N.  Hurley. 
Mr.  Franklin  Q.  Brown. 
Mr.  Paul  FuUer. 
Mr.  George  W.  Norris. 
Mr.  R.  Goodwin  Rhett. 
Mr.  Sol  Wexler. 
Mr.  Harry  A.  Wheeler. 
Mr.  J.  G.  White. 

Claud  De  Baun,  Secretary. 

71 


SECRETARY  GENERAL  OF  THE  PAN  AMERICAN 
FINANCIAL  CONFERENCE, 

L.  S.  HOWE,  LL.  D. 


ASSISTANT  SECRETARIES  GENERAL, 

WILLIAM  FRANKLIN  SANDS. 

BASIL  MILES. 

J.  S.  GITTINGS,  Jr. 

J.  BROOKS  B.  PARKER. 


BUREAU  OF  INFORMATION. 

The  attention  of  the  members  of  the  Conference  is  called  to  the  fact  that  the  Secre- 
tary General  has  established  two  offices,  one  at  the  Pan  American  Union  (Phone  Main 
6638,  Branch  8)  and  the  other  at  the  Hotel  Shoreham  (Phone  Main  8460). 

The  Secretary  General  and  the  Assistant  Secretaries  General  are  at  the  service  of 
members  for  such  further  information  as  they  may  wish  to  secure  concerning  the 
Conference. 
72 


ANNOUNCEMENT. 

The  Secretary  of  the  Treasury  desires  to  avail  himself  of  the  oppor- 
tunity furnished  by  the  publication  of  this  program  to  express  to 
the  official  delegates,  as  well  as  to  the  invited  guests,  his  sincere 
appreciation  of  the  warm  reception  accorded  throughout  the  countries 
of  the  American  continent  to  the  idea  of  convening  a  Pan  American 
Financial  Conference.  The  enthusiastic  response  to  the  invitations 
indicates  that  the  time  is  ripe  for  the  establishment  of  closer  financial 
relations  between  the  people  of  the  United  States  and  the  nations 
of  Central  and  South  America. 

In  order  that  these  Conferences  may  be  productive  of  important 
and  permanent  results,  the  Secretary,  interpreting  what  he  believes 
to  be  the  wish  of  the  members  of  the  Conference,  has  arranged  to 
have  a  group  of  eminent  financiers  and  leading  business  men  of  the 
United  States  meet  with  each  of  the  delegations  from  the  sister 
Republics. 

In  a  sense,  therefore,  the  Conference  will  partake  of  the  nature  of 
a  series  of  meetings  between  the  official  delegates  of  the  Republics 
invited  to  participate  in  the  Conference  and  the  representatives  of 
the  Secretary  of  the  Treasury.  To  make  this  purpose  effective,  it 
has  been  deemed  best  to  reduce  to  a  minimum  the  number  of  joint 
sessions,  and  to  give  as  much  time  as  possible  to  the  Group  or  Com- 
mittee Conferences. 

After  careful  consideration,  the  Secretary  begs  to  suggest  the  fol- 
lowing questions  for  the  consideration  of  the  Group  Committees,  and 
indulges  the  hope  that  the  meetings  of  these  Committees  will  afford 
the  opportunity  for  a  free  and  frank  interchange  of  opinion.  The 
meetings  may  be  of  a  private  and  confidential  nature,  but  it  is  hoped 
that  at  the  final  session  the  delegates  from  each  of  the  countries 
represented  at  the  Conference  will  submit  a  report  of  such  of  the 
proceedings  and  conclusions  of  the  Group  Committees  or  Confer- 
ences as  they  may  deem  advisable,  in  order  that  these  reports  may 
be  published  in  the  proceedings  of  the  Conference. 

73 


QUESTIONS  SUGGESTED  BY  THE  SECRETARY  OF  THE 
TREASURY  FOR  THE  CONSIDERATION  OF  THE  GROUP 
COMMITTEES. 

I.  PUBLIC  FINANCE. 

(a)  Public  Revenues  and  Expenditures  as  Affected  by  Recent  Events 

in  Europe. 

(b)  Measures  Adopted  to  Meet  the  Situation. 

(c)  Proposed  Remedies. 

(d)  Possibilities  of  International  Cooperation. 

II.  THE  MONETARY  SITUATION. 

(a)  Conditions  Prior  to  the  Outbreak  of  the  European  War. 

(b)  Effects  of  the  War. 

(c)  Possibilities  of  International  Cooperation. 

(d)  Outlook  for  Uniform  Monetary  Standards. 

III.  THE  PRESENT  BANKING  SITUATION. 

(a)  Conditions  Existing  Prior  and  Subsequent  to  the  Outbreak  of  the 

European  War. 

(b)  The  Establishment  of  Branch  Banks  and  of  Direct  Exchange. 

(c)  Possibilities  of  Further  International  Cooperation. 

IV.  THE  FINANCING  OF  PUBLIC  IMPROVEMENTS. 

(a)  The  Underwriting  of  National  Loans. 

(6)  The  Underwriting  of  Provincial  or  State  Loans. 

(c)  The  Underwriting  of  Municipal  Loans. 

(d)  The  Relation  of  Public  Credit  to  a  Well  Organized  System  of 

Taxation  and  a  Balanced  Budget. 

V.  THE  FINANCING  OF  PRIVATE  ENTERPRISES. 

(a)  The  Present  Needs  of  Public  Service  Companies,  such  as  Rail- 
road, Street  Railway,  Electric  Light,  Gas,  and  Power  Com- 
panies. 

(&)  The  Needs  of  Merchants  and  Manufacturers. 

(c)  The  Financing  of  Seasonable  Crops. 

(d)  The  Consideration  of  Plans  to  Secure  a  More  Satisfactory  Status 

for  Collateral  as  Security  for  Commodity  Loans. 

(e)  The  Possibility  of  Securing  Greater  Uniformity  in  Laws  Relating 

to  Trade  and  Commerce,  in  Customs  Regulations,  and  the 
More  Effective  Protection  of  Trade-Marks. 

74 


PEOGBAM   AND  LIST   OF   QUESTIONS.  75 

VI.  THE  EXTENSION  OF  INTER-AMEEICAN  MARKETS. 

(a)  Long  Term  Credits  as  a  Means  of  Stimulating  Inter-American 

Trade. 
(&)  Acceptances  and  Discounts  (including  warehouse  receipts)  as  a 

Means  of  Extending  Inter-American  Trade. 

(c)  The  Establishment  of  Direct    Exchange   (often  referred  to  as 

" dollar    exchange")    as    a   Means    of    Extending   American 
Trade. 

(d)  The  Adaptation  of  the  Manufactured  Products  of  the  United 

States  to  the  Needs  of  the  Nations  of  Central  and  South 
America. 

(e)  Tariff  Laws  as  Affecting  Trade  with  the  United  States. 

VII.  MERCHANT  MARINE  AND  IMPROVED  TRANSPORTATION 

FACILITIES. 

(a)  Increased  and  Improved  Ocean  Transportation  Facilities. 

1.  The  present  needs  in  this  respect. 

2.  Statement  of  shipping  facilities  now  enjoyed. 

3.  Suggestions  as  to  the  best  means  of  securing .  improved 

transportation  service. 

4.  What  public  or  private  encouragement  for  improved  trans- 

portation facilities  can  be  expected  from  the  countries 
represented  at  the  Conference. 

(6)  Improved  Postal  Facilities  (including  Money  Orders)  and  Parcel 
Post. 


76  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

FIRST  GENERAL  SESSION. 
Monday  Morning,  May  24th,  10  o'clock. 

HALL   OF   THE   AMERICAS,  PAN    AMERICAN   UNION. 

The  Secretary  of  the  Treasury,  Presiding. 

I.  Address  of  welcome  to  delegates  and  guests  by  the  President 

of  the  United  States. 
II.  Welcome  by  the  Honorable  William  J.  Bryan,  Secretary  of 

State. 

III.  Responses  on  behalf  of  the  Governments  represented  at  the 
Conference. 

The  Secretary  of  the  Treasury  desires  to  announce  that  the  families  of  members  of  the 
Conference  are  cordially  invited  to  the  opening  session. 


MONDAY  AFTERNOON,  MAY  24TH, 

12.15  O'CLOCK. 

T.HE   PRESIDENT  OF  THE  UNITED  STATES  WILL  RECEIVE  THE 

MEMBERS  OF  THE  CONFERENCE  AND  THEIR 

FAMILIES  AT  THE  WHITE  HOUSE. 


SECOND  GENERAL  SESSION. 
Monday  Afternoon,  May  24th,  2.30  o'clock. 

HALL   OF   THE   AMERICAS,  PAN  AMERICAN   UNION. 

I.  Address  of  the  Honorable  William  G.  McAdoo,  Secretary  of 

the  Treasury. 

II.  Address   of    the   Honorable   Albert   S.    Burleson,    Postmaster 
General. 

III.  Address  of  the  Honorable  William  C.  Redfield,  Secretary  of 

Commerce. 

IV.  Addresses  by  members  of  the  Conference. 

V.  Announcement  of  Group  Committees  by  the  Secretary  of  the 
Treasury. 

Monday  Evening,  May  24ih,  9  o'clock. 

PAN  AMERICAN   BUILDING. 

Reception  tendered  by  the  Secretary  of  State  and  the  Secretary 
of  the  Treasury  to  members  of  the  Conference,  their  families,  and 
invited  guests. 


PROGRAM   AND   LIST   OF   QUESTIONS.  77 

THIRD  GENERAL  SESSION. 
Tuesday  Morning,  May  25th,  10  o'clock. 

HALL   OF   THE   AMERICAS,    PAN   AMERICAN   UNION. 

I.  Address  of  the  Honorable  Charles  S.  Hamlin,  Governor  of  the 
Federal  Reserve  Board. 

II.  Address  of  the  Honorable  Paul  M.  Warburg,  member  of   the 
Federal  Reserve  Board,  Washington. 

III.  Addresses  by  members  of  the  Conference. 


Tuesday  Afternoon,  May  25th,  1  o'clock. 

Luncheon  tendered  by  the  Secretary  of  State  to  delegates  from — 

Argentina.  Colombia. 

Bolivia.  Costa  Rica. 

Brazil.  Cuba. 

Chile.  Dominican  Republic. 

Equador. 

Residence  of  the  Secretary  of  State,  Calumet  Place. 

Automobiles  will  leave  the  Pan  American  Union  at  12.45  o'clock. 


Tuesday  Afternoon,  May  25fh,  2.30  o'clock. 

Meetings    of    Group    Conferences    in    Special    Conference    Rooms 
assigned  for  this  purpose  at  the  Hotel  Shoreham. 


Room. 

ARGENTINA 99 

BOLIVIA 101 

BRAZIL 102 

CHILE 104 

COLOMBIA 105 

COSTA  RICA 106 

CUBA 107 

DOMINICAN  P^EPUBLIC 108 

ECUADOR...  .  109 


Room. 

GUATEMALA 110 

HONDURAS Ill 

NICARAGUA 112 

PANAMA 114 

PARAGUAY 115 

PERU 116 

SALVADOR 126 

URUGUAY 127 

VENEZUELA..  .  129 


Tuesday  Afternoon,  May  25th,  5  o'clock. 

Reception  tendered  by  His  Excellency,  the  Argentine  Ambas- 
sador, Honorable  Romulo  S.  Na6n,  to  delegates  on  the  occasion  of 
the  one  hundred  and  fifth  anniversary  of  the  Argentine  independ- 
ence, Argentine  Embassy,  1600  New  Hampshire  Avenue. 


78  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

Wednesday  Morning,  May  26th,  10  o'clock. 


HOTEL   SHOREHAM. 


Group  Conferences  meet  in  the  same  Committee  Rooms  assigned  for 
this  purpose  at  Hotel  Shoreham. 


Wednesday  Afternoon,  May  26th,  1  o'clock. 
Luncheon  tendered  by  the  Secretary  of  State  to  delegates  from — 

Guatemala.  Paraguay. 

Honduras.  Peru. 

Nicaragua.  Salvador. 

Panama.  Uruguay. 

Venezuela. 

Residence  of  the  Secretary  of  State,  Calumet  Place. 
Automobiles  will  leave  the  Hotel  Shoreham  at  12.45  o'clock. 


Wednesday  Afternoon,  May  26fh,  8  o'clock. 

HOTEL   SHOREHAM. 

Group  Conferences  meet  in  the  Special  Committee  Rooms  assigned 
for  this  purpose  at  Hotel  Shoreham. 


Wednesday  Afternoon,  May  26th,  5  o'clock. 

MOTOR   TRIP   AROUND   PARKS    AND   TO    CHEVY    CHASE    CLUB. 

Automobiles  will  leave  the  Hotel  Shoreham  at  5  o'clock  and  go  by 
way  of  Sixteenth  Street  and  Columbia  Road  into  Adams  Mill  Road. 
This  leads  directly  through  the  National  Zoological  Park  and  thence 
into  Rock  Creek  Park.  After  seeing  the  latter,  automobiles  will 
proceed  to  the  north  end  of  the  park  and  thence  to  Chevy  Chase 
Club,  returning  via  Tenallytown  Road  and  Massachusetts  Avenue 
to  the  hotel. 

TEA  AT  CHEVY  CHASE  CLUB,  5.30  O'CLOCK. 

Tea  given  by  members  of  the  Federal  Reserve  Board  to  delegates 
and  guests  of  the  Conference  at  the  Chevy  Chase  Club. 


PROGRAM  AND  LIST   OF   QUESTIONS.  79 

FOURTH  GENERAL  SESSION. 
Thursday  Morning ,  May  27th ,  10  o'clock. 

HALL   OF   THE    AMERICAS,  PAN-AMERICAN    UNION. 

I.  Address  by  the  Honorable  Joseph  E.  Davies,  Chairman  of  the 

Federal  Trade  Commission. 
II.  Address  by  the  Honorable  John  Barrett,  Director  General  of 

the  Pan  American  Union. 

III.  Consideration  of  such  matters  as  may  be  presented  by  members 
of  the  Conference.  At  the  general  sessions  delegates  and 
guests  are  urged  to  express  themselves  freely  on  any  questions 
or  matters  they  may  desire  to  discuss. 


Thursday  Afternoon,  May  27th,  1  o'clock. 

PAN  AMERICAN  UNION. 

Luncheon  tendered  by  the  Secretary  of  the  Treasury  to  members 
of  the  Conference. 


Thursday  Afternoon,  May  27th,  3  o'clock. 

EXCURSION  TO  MOUNT  VERNON. 

The  President  of  the  United  States  has  tendered  to  the  members 
of  the  Conference  the  use  of  The  Mayflower,  which  will  start  at  3.30 
o'clock  from  the  Navy  Yard  for  Mount  Vernon,  Virginia,  the  home 
of  George  Washington,  first  President  of  the  United  States. 

Automobiles  wiU  leave  the  Hotel  Shoreham  at  3  o'clock. 


Friday  Morning,  May  28th,  10  o'clock. 

HOTEL   SHOREHAM. 

Group  Conferences  meet  in  Special  Committee  Rooms  assigned 
for  this  purpose  at  Hotel  Shoreham. 


FIFTH  GENERAL  SESSION. 

Friday  Afternoon,  May  28th,  3  o'clock. 

HALL  OF  THE  AMERICAS,  PAN  AMERICAN  UNION. 

REPORTS  OF  CONFERENCE  COMMITTEES. 

It  is  not  intended  to  limit  the  time  for  reports  to  this  date.     Only 
such  reports  need  be  submitted  at  this  meeting  as  may  be  ready. 


80  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

Friday  Afternoon,  May  28th.,  4.30  o'clock. 

The  members  of  the  Conference  and  their  families  will  be  the 
guests  of  the  Secretary  of  War,  the  Honorable  Lindley  M.  Garrison. 

TRIP   TO   FORT   MYER 

Automobiles  will  leave  the  Pan-American  Union  Building  promptly 
at  4.30  o'clock,  and  will  proceed  direct  to  Fort  Myer,  where  a  special 
drill  has  been  ordered  by  the  Secretary  of  War  in  honor  of  the  mem- 
bers of  the  Conference.  The  return  to  the  Shoreham  will  be  made 
immediately  after  the  drill. 

The  Secretary  of  the  Treasury  desires  to  request  that  the  families 
of  members  of  the  Conference  meet  at  the  Pan-American  Union 
Building  at  4.15  o'clock.  Automobiles  will  be  at  their  service  at  the 
Hotel  Shoreham  at  4  o'clock. 


SIXTH  GENERAL  SESSION. 
Saturday  Morning,  May  29th,  10  o'clock. 

HALL   OF   THE   AMERICAS,   PAN   AMERICAN    UNION. 

I.  Reports  of  Conference  Committees. 
II.  Closing  Address  by  the  Secretary  of  the  Treasury. 
III.  Close  of  the  Conference. 


Saturday  Afternoon,  May  29tli,  5.30  o'clock. 

Mrs.  John  B.  Henderson  will  be  At  Home  at  5.30  o'clock  Satur- 
day afternoon,  May  29th,  at  her  residence,  Sixteenth  Street  and 
Florida  Avenue,  in  honor  of  the  members  of  the  Pan-American 
Financial  Conference. 

Automobiles  will  leave  the  Shoreham  at  5.15  o'clock. 


Saturday  Evening,  May  29th,  8  o'clock. 

HALL   OF   THE   AMERICAS,  PAN   AMERICAN    UNION. 

Banquet  tendered  to  members  of  the  Conference  by  the  Secretary 
of  the  Treasury. 

Sunday,  May  SOih,  12  o'clock. 

Breakfast  tendered  by  the  Assistant  Secretary  of  the  Treasury 
and  Mrs.  Peters  to  ofncial  delegations  and  their  families. 

AT    "WOODLEY,"  WOODLEY   LANE. 

Automobiles  leave  the  Shoreham  Hotel  at  11.45  o'clock. 


PROGRAM   AND   LIST   OF    QUESTIONS. 

Monday,  May  Slst-Sunday,  June  IStli. 


81 


ITINERARY. 


LIST  OF  CITIES. 
Monday,  May  31st,  1915. 

Via  W.,  B.  &  A.  Electric  Railroad. 

Lv.  Washington,  D.  C '. 9.05  A.  M. 

Ar.  Annapolis,  Md .' .  10.35  A.  M. 

Lv.  Annapolis,  Md 12  M. 

Ar.  Baltimore,  Md 1.10  P.  M! 

Luncheon  and  Dinner,  Baltimore.     . 
Tuesday,  June  1st,  1915. 

Via  Pennsylvania  Railroad. 

Lv.  Baltimore,  Md 1.30  A.  M. 

Ar.  Philadelphia  (Broad  Street  Station) 4.00  A.  M. 

Wednesday,  June  2d,  1915. 

Luncheon  and  Dinner  on  train. 

Lv.  Philadelphia,  Pa 1.00P.M. 

Ar.  Pittsburgh,  Pa 10.00  P.  M. 

Friday,  June  4th,  1915. 

Via  Pennsylvania  Lines. 
Luncheon,  Dinner,  and  Breakfast  on  train. 

Lv.  Pittsburgh,  Pa 1.00  P.  M. 

98257°— 15 6 


82  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

Saturday,  June  5th,  1915. 
AT.  St.  Louis,  Mo 9.00  A.  M. 

Sunday,  June  6th,  1915. 

Via  Wabash  Railroad. 
Dinner  on  train. 

Lv.  St.  Louis,  Mo 3.00  P.  M. 

Ar.  Chicago,  111 10.00P.M. 

Tuesday,  June  8ih,  1915. 

Via  Michigan  Central  R.  R. 
Lv.  Chicago,  IU 11.00  P.  M. 

Wednesday,  June  9th,  1915. 

Breakfast. 

Ar.  Detroit,  Mich 8.30  A.  M. 

Lv.  Detroit,  Mich 11.00P.M. 

Thursday,  June  10th,  1915. 

Ar.  Niagara  Falls,  N.  Y 8.00  A.  M. 

By  motor  cars. 

Lv.  Niagara  Falls,  N.  Y 4.00  P.  M. 

Ar.  Buffalo,  N.  Y 5.00  P.  M. 

Friday,  June  llfh,  1915. 
Via  New  York  Central  Lines. 

Breakfast  and  Luncheon. 

Lv.  Buffalo,  N.  Y 12.30  Night. 

Ar.  Schenectady,  N.  Y 8.00  A.  M. 

Lv.  Schenectady,  N.  Y '. 12.30  Noon. 

Ar.  Boston,  Mass 6.10  P.  M. 

Sunday,  June  13th,  1915. 

Via  N.  Y.,  N.  H.  &  H.  R.  R. 
Luncheon  and  Dinner. 

Lv.  Boston,  Mass.  (South  Station) 3.00  P.  M. 

Ar.  New  York  (Grand  Central  Station) ,....,..*..., ,       ..9.00P,  M, 


PROCEEDINGS  OF  THE  GENERAL 

SESSIONS 


83 


OPENING  SESSION 


MONDAY  MORNING,  MAY  24,  1915 


85 


OPENING  SESSION,  MONDAY  MORNING  MAY  24. 


The  Conference  was  called  to  order  at  10  o'clock  a.  m.  by  the 
Honorable  William  G.  McAdoo,  Secretary  of  the  Treasury  of  the 
United  States. 

Secretary  McADoo.  Ladies  and  gentlemen,  I  have  the  honor  to 
introduce  the  President  of  the  United  States.  [Loud  applause.] 

ADDRESS  OF  THE  PRESIDENT  OF  THE  UNITED  STATES. 

MR.  CHAIRMAN,  GENTLEMEN  OF  THE  AMERICAN  REPUBLICS,  LADIES, 
AND  GENTLEMEN: 

The  part  that  falls  to  me  this  morning  is  a  very  simple  one,  but  a 
very  delightful  one.  It  is  to  bid  you  a  very  hearty  welcome  indeed 
to  this  conference.  The  welcome  is  the  more  hearty  because  we  are 
convinced  that  a  conference  like  this  will  result  in  the  things  that 
we  most  desire.  I  am  sure  that  those  who  have  this  conference  in 
charge  have  already  made  plain  to  you  its  purpose  and  its  spirit. 
Its  purpose  is  to  draw  the  American  Republics  together  by  bonds 
of  common  interest  and  of  mutual  understanding  [applause]  ;  and  wo 
comprehend,  I  hope,  just  what  the  meaning  of  that  is.  There  can  be 
no  sort  of  union  of  interest  if  there  is  a  purpose  of  exploitation  by  any 
one  of  the  parties  to  a  great  conference  of  this  sort.  The  basis  of 
successful  commercial  intercourse  is  common  interest,  not  selfish 
interest.  It  is  an  actual  interchange  of  services  and  of  values :  it  is 
based  upon  reciprocal  relations  and  not  selfish  relations.  It  is  based 
upon  those  things  upon  which  all  successful  economic  intercourse 
must  be  based,  because  selfishness  breeds  suspicion;  suspicion,  hos- 
tility ;  and  hostility,  failure.  We  are  not,  therefore,  trying  to  make 
use  of  each  other,  but  we  are  trying  to  be  of  use  to  one  another. 
[Applause.] 

It  is  very  surprising  to  me,  it  is  even  a  source  of  mortification,  that 
a  conference  like  this  should  have  been  so  long  delayed,  that  it  should 
never  have  occurred  before,  that  it  should  have  required  a  crisis  of 
the  world  to  show  the  Americas  how  truly  they  were  neighbors  to 
one  another.  If  there  is  any  one  happy  circumstance,  gentlemen, 
arising  out  of  the  present  distressing  condition  of  the  world,  it  is 
that  it  has  revealed  us  to  one  another :  it  has  shown  us  what  it  means 

87 


88  PAN"  AMERICAN  FINANCIAL  CONFERENCE. 

to  be  neighbors.  And  I  cannot  help  harboring  the  hope,  the  very 
high  hope,  that  by  this  commerce  of  minds  with  one  another,  as  well 
as  commerce  in  goods,  we  may  show  the  world  in  part  the  path  to 
peace.  It  would  be  a  very  great  thing  if  the  Americas  could  add  to 
the  distinction  which  they  already  wear  this  of  showing  the  way  to 
peace,  to  permanent  peace.  [Applause.] 

The  way  to  peace  for  us,  at  any  rate,  is  manifest.  It  is  the  kind 
of  rivalry  which  does  not  involve  aggression.  It  is  the  knowledge 
that  men  can  be  of  the  greatest  service  to  one  another,  and  nations 
of  the  greatest  service  to  one  another,  when  the  jealousy  between 
them  is  merely  a  jealousy  of  excellence,  and  when  the  basis  of  their 
intercourse  is  friendship.  [Applause.]  There  is  only  one  way  in 
which  we  wish  to  take  advantage  of  you  and  that  is  by  making  better 
goods  [applause],  by  doing  the  things  that  we  seek  to  do  for  each 
other  better,  if  we  can,  than  you  do  them,  and  so  spurring  you  on,  if 
we  might,  by  so  handsome  a  jealousy  as  that  to  excel  us.  I  am  so 
keenly  aware  that  the  basis  of  personal  friendship  is  this  competition 
in  excellence,  that  I  am  perfectly  certain  that  this  is  the  only  basis 
for  the  friendship  of  nations, — this  handsome  rivalry,  this  rivalry  in 
which  there  is  no  dislike,  this  rivalry  in  which  there  is  nothing  but 
the  hope  of  a  common  elevation  in  great  enterprises  which  we  can 
undertake  in  common. 

There  is  one  thing  that  stands  in  our  way  among  others — for  you 
are  more  conversant  with  the  circumstances  than  I  am;  the  thing 
I  have  chiefly  in  mind  is  the  physical  lack  of  means  of  communi- 
cation, the  lack  of  vehicles, — the  lack  of  ships,  the  lack  of  established 
routes  of  trade, — the  lack  of  those  things  which  are  absolutely  neces- 
sary if  we  are  to  have  true  commercial  and  intimate  commercial 
relations  with  one  another;  and  I  am  perfectly  clear  in  my  judgment 
that  if  private  capital  cannot  soon  enter  upon  the  adventure  of 
establishing  these  physical  means  of  communication,  the  govern- 
ment must  undertake  to  do  so.  [Applause.]  We  cannot  indefinitely 
stand  apart  and  need  each  other  for  the  lack  of  what  can  easily  be 
supplied,  and  if  one  instrumentality  cannot  supply  it,  then  another 
must  be  found  which  will  supply  it.  We  cannot  know  each  other  un- 
less we  see  each  other ;  we  cannot  deal  with  each  other  unless  we  com- 
municate with  each  other.  So  soon  as  we  communicate  and  are  upon 
a  familiar  footing  of  intercourse,  we  shall  understand  one  another, 
and  the  bonds  between  the  Americas  will  be  such  bonds  that  no 
influence  that  the  world  may  produce  in  the  future  will  ever  break 
them.  [Applause.] 

If  I  am  selfish  for  America,  I  at  least  hope  that  my  selfishness  is 
enlightened.  The  selfishness  that  hurts  the  other  party  is  not  en- 
lightened selfishness.  If  I  were  acting  upon  a  mere  ground  of  selfish- 
ness, I  would  seek  to  benefit  the  other  party  and  so  tie  him  to  myself ; 


PfcOCEEDIHGS.  BO 

so  that  even  if  you  were  to  suspect  me  of  selfishness,  I  hope  you  will 
also  suspect  me  of  intelligence  and  of  knowing  the  only  safe  way  for 
the  establishment  of  the  things  which  we  covet,  as  well  as  the  estab- 
lishment of  the  things  which  we  desire  and  which  we  would  feel 
honored  if  we  could  earn  and  win. 

I  have  said  these  things  because  they  will  perhaps  enable  you  to 
understand  how  far  from  formal  my  welcome  to  this  body  is.  It  is 
a  welcome  from  the  heart,  it  is  a  welcome  from  the  head ;  it  is  a  wel- 
come inspired  by  what  I  hope  are  the  highest  ambitions  of  those 
who  live  in  these  two  great  continents,  who  seek  to  set  an  example 
to  the  world  in  freedom  of  institutions,  freedom  of  trade,  and  intelli- 
gence of  mutual  service.  [Loud  and  prolonged  applause.] 

Secretary  McAooo.  Ladies  and  gentlemen,  I  now  have  the  honor 
of  introducing  the  Secretary  of  State,  the  Honorable  William  J. 
Bryan.  [Applause.] 

ADDRESS  OF  HON.  WILLIAM  J.  BRYAN,  SECRETARY  OF  STATE. 

MR.  PRESIDENT,  Mr.  SECRETARY,  REPRESENTATIVES  OF  PAN  AMERICA, 
LADIES,  AND  GENTLEMEN: 

If  you  will  consult  the  program  you  will  find  that  I  am  to  deliver 
an  address  of  welcome,  but  it  is  superfluous  for  me  to  welcome  you 
after  the  eloquent  and  appropriate  words  to  which  you  have  just 
listened.  On  ordinary  occasions  the  Secretary  of  State,  as  the 
President's  representative  in  dealing  with  foreign  nations,  welcomes 
visitors,  but  this  is  not  an  ordinary  occasion — it  is  an  epoch-making 
event,  and  it  was  fitting,  therefore,  that  the  welcome  should  be 
spoken  by  the  President  himself  and  not  by  a  representative.  If 
the  welcome  extended  to  you  was  to  be  as  whole-souled  as  that 
expressed  in  the  Spanish  phrase  which,  translated  into  English, 
means  "my  house  is  your  house,"  it  must  come  from  the  occu- 
pant of  the  White  House.  [Applause.]  My  only  duty,  as  I  see  it, 
after  the  felicitous  words  have  been  addressed  to  you  by  the  Presi- 
dent, is  to  give  cordial  approval  to  the  noble  idea,  conceived  by  the 
Honorable  Secretary  of  the  Treasury,  which  has  resulted  in  this 
notable  gathering.  I  do  give  emphatic  indorsement  to  this  idea  and 
expect  this  conference  to  have  lasting  and  far-reaching  results.  I 
shall  content  myself  with  presenting  the  one  thought  that  has  been 
uppermost  in  my  mind  since  this  idea  was  presented  to  our  Nation 
and  to  the  nations  assembled  here.  It  is  the  idea  that  we  are 
neighbors. 

God  in  His  providence  has  made  these  Republics  the  joint  tenants 
of  that  wonderful  heritage  which  extends  from  the  St.  Lawrence 
and  Puget  Sound  on  the  north  to  Cape  Horn  on  the  south.  We 
have  taken  upon  ourselves  the  responsibility  of  developing  this 


00  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

territory  for  ourselves  and  for  the  world.  It  is  dedicated  to  a  sys- 
tem of  government — to  the  republican  form  of  government.  May  I 
not  describe  these  Eepublics  as  resembling  a  great  banyan  tree  ?  The 
United  States  is  the  parent  stem;  the  branches,  extending  to  the 
south,  have  taken  root  in  the  soil  and  are  now  permanent  supports — 
yes,  important  parts — of  that  great  tree.  Linked  together  by  a  unity 
of  political  purpose  and  by  a  common  political  ideal  these  Eepublics 
can  not  but  be  interested  in  each  other.  We  are  geographically  so 
situated  that  we  must  live  side  by  side,  and  certain  expectations  are 
aroused  by  the  very  fact  that  we  are  neighbors. 

The  first  is  that  we  shall  know  each  other.  Neighbors  should 
become  acquainted,  and  this  great  meeting  must  result  in  an  extension 
of  acquaintance  which  is  not  only  desirable,  but  necessary.  I  am  sure 
that  the  Secretary  of  the  Treasury  had  in  mind  this  more  intimate 
association ;  as  we  know  each  other  better  we  shall  be  more  and  more 
assured  of  the  good  will  of  each  toward  the  other. 

The  second  expectation  aroused  by  the  fact  that  we  are  neighbors 
is  that  we  shall  be  friends.  This  feeling  of  friendship  is  growing 
and  will  continue  to  grow.  Time  tends  to  increase  it  and  words 
spoken  by  the  representatives  of  the  several  nations  have  promoted 
its  growth.  The  memorable  address  delivered  by  our  Chief  Execu- 
tive at  Mobile  a  year  ago,  when  he  restated  what  has  been  so  often 
stated  before,  that  this  Nation  has  no  desire  to  take  one  foot  of  land 
from  any  other  nation  by  conquest — I  am  sure  that  this  utterance 
has  contributed  something  toward  the  cementing  of  our  friendship. 
And  may  I  refer  to  one  other  thing  which  has  had  an  influence  ?  It 
is  the  fact  that  this  Nation  is  now  united  to  the  Spanish- speaking 
Republics  by  treaties  that  provide  for  investigation  of  all  disputes, 
leaving  no  cause  for  which  we  can  go  to  war  until  after  there  has 
been  a  year's  time  for  deliberation  and  for  passion  to  subside.  [Ap- 
plause.] This  country  has  shown  its  good  will  by  offering  to  all  of 
the  American  Republics,  without  respect  to  size,  such  a  treaty,  and 
these  Republics  have  responded  in  the  spirit  in  which  the  offer  was 
made.  We  may  feel  certain  therefore  that  in  the  years  to  come 
there  will  be  no  hasty  rushing  into  armed  conflict ;  indeed,  we  have 
such  faith  in  the  power  of  reason,  when  controlled  by  friendship,  that 
we  are  confident  that  a  year's  inquiry  will  enable  us  to  find  peaceful 
means  of  settling  any  disputes  that  may  arise. 

The  third  expectation,  suggested  by  the  fact  that  we  live  side  by 
side,  is  that  of  mutual  helpfulness.  Neighbors  must  not  only  know 
each  other  and  be  friends,  but  neighbors  must  help  each  other  as 
opportunity  offers.  With  acquaintance  increasing  and  friendship 
established,  I  take  it  that  the  principal  purpose  of  this  meeting  is  to 
find  ways  in  which  we  may  be  helpful  to  each  other. 


PROCEEDINGS.  91 

The  President  has  suggested  one,  and  a  very  important  one, 
namely,  cooperation  in  the  providing  of  means  of  communication. 
He  has  used  his  great  influence  to  secure  authority  for  this  Nation 
to  do  its  part,  and  I  doubt  not  that  his  efforts  will  find  a  response  in 
the  nations  here  assembled  and  that  in  the  course  of  time  these  na- 
tions, by  cooperation,  will  establish  lines  of  communication  which 
will  not  only  be  of  advantage  in  ordinary  times  but  will  protect  our 
commerce  from  interruption  if  at  any  future  time  the  nations  in 
other  parts  of  the  world  find  themselves  unable  to  settle  their  dis- 
putes by  the  peaceful  methods  which  we  expect  to  employ.  [Ap- 
plause.] 

There  are  other  matters  in  which  cooperation  is  possible,  as  for  in- 
stance in  finance  and  communication  by  wire  and  by  mail,  of  which 
the  Secretary  of  the  Treasury  will  speak  more  at  length. 

But  I  would  not  be  pardoned  if,  with  so  many  of  our  distinguished 
guests  prepared  to  speak,  and  so  inspiring  an  audience  anxious  to 
listen,  I  were  to  trespass  further  upon  your  time.  Let  me  therefore, 
in  conclusion,  emphasize  the  thought  that  brought  me  before  you, 
namely,  that  the  State  Department  will,  in  every  possible  way,  give 
support  to  the  splendid  efforts  of  the  Secretary  of  the  Treasury  to 
crystallize  acquaintance  and  friendship  into  practical  helpfulness 
and,  to  the  fullest  extent,  promote  cooperation  between  the  Eepublics 
whose  representatives  are  assembled  in  conference.  [Great  ap- 
plause.] 

Secretary  McAooo.  Eesponse  will  now  be  made  by  the  representa- 
tives of  the  Republics  present.  I  shall  call  the  roll  of  the  Republics 
in  their  alphabetical  order.  I  have  the  honor  of  introducing  Dr. 
Samuel  Hale  Pearson,  of  the  Argentine  Republic.  [Applause.] 

ADDRESS  OF  HON.  SAMUEL  HALE  PEARSON,  OF  ARGENTINA. 

MR.  PRESIDENT,  LADIES,  AND  GENTLEMEN: 

On  behalf  of  the  delegation  of  the  Argentine  Republic  to  this  Pan 
American  Financial  Conference,  permit  me  first  of  all  to  express  the 
profound  gratitude  of  "our  delegation  for  the  privilege  afforded  us 
of  attending  these  sessions  in  which  so  many  able  and  distinguished 
men  of  the  Americas  are  taking  part. 

I  desire  also,  Mr.  President,  to  bring  to  you  the  assurance  from 
my  Government  and  my  fellow  countrymen  that  the  suggestion  of 
holding  this  Conference  was  received  in  Argentina  with  unanimous 
expressions  of  deepest  sympathy  and  interest,  and  I  have  full  justi- 
fication in  saying  that  earnest  hope  and  confident  belief  are  enter- 
tained there  that  this  gathering  will  result  in  the  realization  of  a 
long-cherished  Pan  American  ideal. 


92  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

The  regrettable  events  occurring  in  Europe  during  the  past  year, 
together  with  a  combination  of  other  unfortunate  circumstances,  have 
affected  international  trade,  upon  which  rested  the  production  of  the 
wealth  and  the  prosperity  of  the  world  and  upon  which  we  founded 
and  based  the  development  of  our  industries  and  finances. 

The  suggestion  of  the  holding  of  this  Financial  Conference,  made 
by  the  Government  of  the  United  States  has  come  at  a  propitious 
moment,  and  its  success  already  in  this  very  hour  is  assured  by  the 
presence  here  of  the  representatives  of  so  many  American  nations. 

Of  the  serious  problems  which  we  are  about  to  consider  in  con- 
ference, permit  me  to  say  that  the  Argentine  delegation  cherishes 
the  hope  that  in  our  gathering  and  in  our  deliberations  together  we 
shall  find  the  way  toward  reestablishing  an  equilibrium  in  the 
economic  life  of  America  by  Pan  American  methods  and  with  Pan 
American  resources.  To  accomplish  this  I  feel  certain  that  we 
shall  not  be  obliged  to  create  a  new  interdependence  among  the 
American  Republics  such  as  formerly  existed  with  Europe,  but  that 
the  immediate  and  permanent  result  will  be  the  stimulation  of  inter- 
American  reciprocity  in  the  field  of  commerce  and  finance.  [Great 
applause.] 

Secretary  McAooo:  I  now  have  the  pleasure  of  calling  on  the 
representative  of  Bolivia,  Dr.  Ignacio  Calderon. 

ADDRESS  OF  HON.  IGNACIO  CALDERON,  OF  BOLIVIA. 

MR.  PRESIDENT,  MR.  SECRETARY,  GENTLEMEN  OF  THE  CONFERENCE, 
AND  LADIES  AND  GENTLEMEN  : 

In  the  corridors  of  this  building  are  gathered  the  flags  of  all  the 
Republics  of  America,  and  under  the  leadership  of  the  Stars  and 
Stripes  they  stand  for  peace  and  liberty.  [Applause.]  The  United 
States  is  often  called  the  melting  pot  of  the  nations.  Let  all  of  the 
Western  Hemisphere  become  the  melting  pot  where  will  be  smelted 
every  religious  and  race  prejudice;  the  unjustifiable  class  distinc- 
tions and  the  traditions  of  one-man  power,  where  will  be  crystallized 
the  true  fraternity  of  men  and  the  glory  of  national  sovereignty. 

By  a  strange  coincidence  of  the  most  diverse  events,  the  community 
of  our  interests  has  become  very  apparent.  The  Panama  Canal  makes 
us  very  near  neighbors  and  opens  the  way  to  an  increased  exchange 
of  trade  relations.  The  war  in  Europe,  by  abruptly  stopping  the 
economic  interchange  with  our  countries,  has  more  than  any  other 
event  opened  our  eyes  to  the  importance  of  strengthening  our  com- 
mercial ties.  The  able  Secretary  of  the  Treasury  saw  with  clear  per- 
ception that  the  time  had  come  to  bring  about  a  Pan  American  com- 
mercial and  financial  understanding,  and  hence  this  congress. 


PROCEEDINGS.  93 

The  friendship  of  the  American  Republics  is  not  and  must  not 
be  based  on  artificial  ententes  or  alliances,  but  must  have  back  of  it 
the  whole  strength  of  the  will  of  the  peoples  of  this  continent  and 
the  moral  power  of  those  great  ideals  so  admirably  and  forcibly  pro- 
pounded by  the  illustrious  president  of  the  United  States  in  many 
public  utterances.  [Applause.] 

Mankind  does  not  advance  forward  and  onward  to  its  highest 
destinies  by  hatred,  selfishness,  or  violence.  The  living  forces  are 
right  and  justice,  and  the  beautiful  and  disinterested  aspirations  of 
love.  [Applause.] 

We  are  here  now  to  discuss  the  commercial  problems  that  pertain 
to  us.  We  will  enter  on  our  discussions  inspired  by  sentiments  of 
mutual  helpfulness  and  confidence. 

We  all  know  that  no  business  ca"n  thrive  unless  both  parties  to  the 
transaction  equally  share  the  benefits.  True  economic  principles  ex- 
clude all  selfish  and  deliberate  plans  to  get  the  better  of  some  one. 
The  general  welfare  of  the  people  is  the  strongest  commercial  and 
financial  asset,  and  the  greater  that  general  welfare  the  larger  is  the 
field  for  successful  undertakings. 

By  following  in  our  intercourse  the  broad  and  loyal  spirit  of  friendly 
concern  for  the  progress  of  our  countries  we  will  give  substantial 
impetus  to  the  cause  of  Pan  American  financial  and  commercial  de- 
velopment, and  at  the  same  time  stimulate  our  progress  and  friend- 
ship. 

Such  are  the  wishes  of  the  Bolivian  delegation,  which  thanks  most 
sincerely  His  Excellency  the  President  for  his  hearty  welcome. 
[Great  applause.] 

Secretary  McADOo.  I  have  the  honor  of  introducing  Dr.  Amaro 
Cavalcanti,  of  Brazil. 

ADDRESS  OF  HON.  AMARO  CAVALCANTI,  OF  BRAZIL. 

MR.  PRESIDENT  AND  LADIES  AND  GENTLEMEN  : 

We  have  listened  with  great  respect  and  satisfaction  to  the  words 
of  welcome  and  of  encouragement  which  have  been  spoken  by  the 
President  and  the  Secretary  of  State  on  the  subject  of  the  Pan 
American  Financial  Conference  just  now  being  inaugurated. 

As  far  as  concerns  Brazil,  we  consider  such  an  important  fact  as 
one  more  proof  of  the  same  continued  endeavor  on  the  part  of  the 
United  States  to  enlarge  the  most  profitable  relations  between  all 
the  American  Republics,  as  has  been  maintained  and  affirmed  by  its 
governments  ever  since  the  First  American  International  Confer- 
ence, which  also  met  at  Washington  about  twenty-five  years  ago ;  and 
its  significance  is  at  this  moment  very  much  increased  because  of  two 


94  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

extraordinary  events — the  opening  of  the  Panama  Canal  and  the 
European  war. 

It  will  be  unnecessary  to  add  that  these  world  events  in  creating 
a  new  economic  situation  and  new  conditions  in  regard  to  foreign 
trade  are  urging  the  nations  of  this  continent  to  adopt,  as  soon  as 
possible,  such  adequate  and  provident  measures  as  have  been  re- 
quired at  no  other  time.  For,  in  one  case,  all  of  them  are  interested 
in  taking  the  profits  and  advantages  to  be  expected  from  the  new 
route  now  opened  to  commercial  relations ;  in  the  other  case  we  all 
are  no  less  interested  and  determined  to  get  rid,  as  much  as  possible, 
of  the  disastrous  effects  of  that  war,  which  constitutes  a  most 
flagrant  crime  against  our  Christian  civilization.  And  while  the 
most  advanced  nations  of  Europe,  the  greatest  world  powers  them- 
selves, by  disregarding  the  treaties  and  violating  the  laws  and  prin- 
ciples of  humanity,  are  at  present  raging  against  one  another  in  a 
furious  war,  which  is  destroying  all  the  progress  and  beneficial 
results  of  civilization,  it  is  fitting  to  emphasize  the  fact  (and  this  is 
done  with  great  satisfaction)  that  this  great  Republic  is  devoting 
her  best  efforts  to  the  work  of  consolidating  a  permanent  peace 
among  all  the  peoples  of  this  continent,  doing  so  in  a  most  effective 
way — that  is,  by  striving  for  the  common  development  of  their 
wealth  and  welfare. 

This  imposes  upon  us  the  agreeable  duty  of  congratulating  your 
Government  in  the  name  of  my  country  upon  such  a  meritorious 
action. 

Further,  as  to  the  subject  of  the  Conference  itself,  if  we  might  be 
permitted  to  quote — which  the  time  does  not  permit — some  of  the 
words  of  your  lofty-minded  statesman,  James  G.  Blaine,  the  Secre- 
tary of  State,  when  addressing  the  delegates  to  the  First  American 
International  Conference  in  1889,  we  should  see  that  the  policy  of 
the  United  States  toward  its  sister  Republics  in  Central  and  South 
America  has  been,  fortunately,  characterized  by  such  high  sentiments 
as  to  inspire  in  all  a  justified  confidence,  and  that  the  utterances 
themselves  of  its  government  in  the  past  are  almost  identical  with 
the  eloquent  words  we  have  just  heard  from  the  President  of  the 
United  States  on  the  intention  to  establish  bases,  proper  and  suitable, 
to  foster  an  increasing  intercourse  between  all  American  countries. 

There  will  be,  of  course,  some  difficulty  in  ascertaining  and  adjust- 
ing such  proper  bases ;  but  difficulty  does  not  mean  impossibility.  In 
this  world  of  human  affairs  nothing  is  impossible,  there  being  sin- 
cerity of  purpose,  respect  for  one  another's  rights,  reciprocity  of 
interest  and  advantages,  and,  above  all,  the  good  will  of  the  interested 
parties.  If  all  are  willing  to  cooperate  with  such  disposition  of 
mind,  success  can  not  fail  to  be  the  natural  outcome  of  their  aims 
and  transactions.  Obviously  no  inherent  difficulty  can  exist  for 


PKOCEEDINGS.  95 

North  America  to  understand  the  trade  conditions,  resources,  and 
methods  of  Central  and  South  America,  and  vice  versa. 

What  remains  to  be  done,  and  it  is  a  great  deal,  is  to  strive  to 
acquire  a  complete  understanding  of  all  facts  and  of  practical  means 
by  which  trade,  commerce,  industry,  banking,  and  transportation  may 
be  carried  on  in  the  other  parts  of  the  continent  in  order  that  mutual 
benefits  may  be  secured  to  producers  and  manufacturers,  to  importers 
and  exporters,  to  customers  and  consumers  in  all  the  countries  con- 
cerned. We  should  say  more  precisely  what  is  necessary  is  to  find 
out  what  products  or  manufactures  each  may  profitably  buy  from 
North  America  as  well  as  to  find  out  what  each  can  sell  to  North 
American  customers  and  consumers. 

Thus  by  a  careful  examination  of  the  facts  and  by  a  patient  inter- 
change of  views  among  all  the  representatives  of  the  Republics 
present  at  this  Conference,  each  familiar  with  the  elements  relating 
to  the  production,  manufacture,  internal  and  foreign  trade,  banking, 
and  the  like,  of  his  own  country — it  is  to  be  hoped  that  the  Con- 
ference will  be  enabled  to  arrive  at  its  very  important  object. 

In  two  things,  however,  wre  beg  leave  to  anticipate:  One  is  that 
now  is  a  very  opportune  time  for  North  America  seriously  to  set 
about  the  studying  and  better  understanding  of  Central  and  South 
America,  and  vice  versa;  the  other  is,  that  the  more  we  study  and 
understand  the  needs  of  one  another  the  larger  will  be  the  reciprocal 
share  of  commercial  returns  and  earnings  for  all  the  countries. 

To  the  Brazilian  delegation's  mind,  all  of  us  here  assembled  will 
certainly  not  be  contented,  at  this  time,  with  affirming  again  by 
resolutions  or  votes  that  the  Republics  we  are  representing  are  and 
sincerely  desire  to  continue  to  be  good  friends  one  to  another  in  all 
matters  of  international  character  that  may  arise.  These  affirma- 
tions, albeit  of  great  value,  do  not  suffice  for  the  particular  moment. 
We  come  for  something  more  than  this — that  is  to  say,  for  the  object 
of  working  together  in  such  a  manner  and  with  such  earnest  intent 
that  the  transactions  of  this  Conference  may  result  in  measures  and 
resolutions  capable  of  bringing  about  the  economic  improvement  of 
the  American  Republics — measures  and  resolutions  of  practical  effi- 
ciency, in  accordance  with  the  peculiar  resources  of  each  country. 

Let  us,  then,  join  hands  and  assist  in  the  common  development  of 
all  America.  [Applause.] 

As  has  been  very  often  observed,  good  intent  begets  like  sentiments, 
and  these  in  their  turn  beget  sympathy  and  good  will ;  and  no  work 
of  common  interest  is  impossible  of  complete  realization  when  it 
starts  under  the  influence  of  such  intentions.  All  difficulty  ceases 
where  good  will  and  cooperation  are  really  existing. 

Now  in  closing,  Mr.  President,  we  must  apologize  for  having 
abused  your  generous  attention,  and  permit  us  to  express  to  you  and 


96  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

to  your  Government  our  sincere  gratitude  for  the  gracious  hospi- 
tality with  which  Brazil  has  been  received.     [Great  applause.] 

Secretary  McADoo.  I  have  the  honor  of  introducing  Dr.  Luis 
Izquierdo,  of  Chile. 

ADDRESS  OF  HON.  LUIS  IZQUIERDO,  OF  CHILE. 

MR.  PRESIDENT,  LADIES,  AND  GENTLEMEN  : 

The  delegates  from  Chile  have  heard  with  great  attention  the 
noble  words  of  the  addresses  delivered  by  you,  Mr.  President,  and 
Mr.  Secretary  Bryan,  and  I  feel  it  my  duty  to  begin  by  expressing, 
as  the  gentlemen  who  preceded  me  have  done,  the  cordial  apprecia- 
tion of  the  Government  of  Chile  for  the  invitation  extended  to  them 
in  your  name  and  in  the  name  of  the  United  States. 

Since  the  days  of  our  political  independence  Chile  and  all  the  new 
Latin- American  Republics  have  opened  their  doors  wide  to  the  com- 
merce and  friendship  of  the  whole  civilized  world.  From  the  begin- 
ning our  trading  and  financial  relations  with  the  old  countries  of 
Europe,  from  which  we  both  of  North  America  and  South  America 
are  proud  to  descend,  acquired  great  importance;  while  the  United 
States,  engaged  in  developing  its  own  resources,  has  only  recently 
been  able  to  show  an  interest  in  coming  into  close  touch  with  our 
countries. 

It  is  only  a  quarter  of  a  century  ago,  Mr.  President,  since  your 
Government  invited  here  the  first  of  the  International  Pan  Ameri- 
can Congresses,  which  have  done  a  great  deal,  in  principle  at  least,  to 
foster  relations  among  the  nations  of  the  whole  hemisphere  and  to 
establish  among  them  that  common  confidence  without  which  no  in- 
ternational friendship  can  exist.  [Applause.] 

In  recent  years  we  have  had  the  honor  of  welcoming  in  our  coun- 
tries such  eminent  personalities  of  the  United  States  as  former  Presi- 
dent Roosevelt,  Secretary  of  State  Bryan,  the  Honorable  Elihu  Boot, 
and  the  Honorable  Robert  Bacon ;  we  have  received  delegations  from 
the  chambers  of  commerce  of  Boston  and  other  centers  of  this  coun- 
try, and  we  have  also  been  favored  by  the  visit  of  some  of  the  most 
prominent  members  of  your  universities,  guided  by  that  distinguished 
Pan  Americanist,  who  has  accepted  the  position  of  secretary  general 
to  this  Conference,  Dr.  Rowe.  [Applause.] 

We  begin  to  be  better  known  to  the  United  States,  and  the  im- 
mense possibilities  the  southern  continent  offers  to  this  great  com- 
munity of  the  north  are  now  being  realized.  It  is  a  fact  that  in  a 
little  over  twenty  years  the  trade  of  the  United  States  with  Latin 
America  has  increased  from  $250,000,000  in  1890— the  year  of  the 
first  Pan  American ,  Congress — to  more  than  $800,000,000,  and  it 
continues  to  increase. 


PROCEEDINGS.  97 

Two  facts  of  the  most  unusual  meaning,  which  have  been  referred 
to  by  the  Bolivian  minister  and  by  the  delegate  from  Brazil,  help  now 
to  expand  our  commercial  relations  with  the  United  States — the 
opening  of  the  Panama  Canal  and  the  European  war.  The  opening 
of  the  Panama  Canal  could  not  but  have  enormous  influence  on  the 
established  routes  of  trade.  We  can  say  without  hyperbole  that 
the  Panama  Canal,  as  the  Suez  Canal  did,  has  really  modified  the 
geography  of  the  world.  When  the  Suez  Canal  was  opened,  the 
Mediterranean  trdde  acquired  new  life,  and  old  declining  ports,  such 
as  Marseilles,  Genoa,  and  Naples,  could  trade  directly  with  the  Far 
East  without  the  intervention  of  the  maritime  countries  which  for- 
merly monopolized  that  trade. 

The  opening  of  the  Panama  Canal  signifies  much  for  us,  inhabi- 
tants of  the  southern  part  of  the  hemisphere.  The  principal  Chilean 
port,  Valparaiso,  connected  with  the  Atlantic  by  a  transandine  rail- 
way, lies  in  direct  line  at  4,660  miles  from  New  York.  Our  north- 
ern port  of  Arica,  connected  with  Bolivia  by  another  transandine 
railway,  lies  at  less  than  4,000  miles  from  New  York. 

On  the  other  hand,  the  war  in  Europe  is  hindering  and  in  some 
cases  is  paralyzing  and  stopping  the  commercial  intercourse  of  Latin 
America  with  its  European  markets,  and  this  not  only  on  account 
of  the  troubles  in  the  production  and  industrial  life  in  Europe,  but 
principally  on  account  of  the  sudden  lack  of  shipping,  which  was 
universally  the  first  consequence  of  the  war. 

Here  is  a  field  open  to  the  activities  of  business  men  in  the  United 
States  and  to  the  production  of  its  manufacturing  industry,  and  I 
may  add  that  this  field  would  have  been  opened  by  the  sole  powerful 
action  of  economical  laws,  even  if  the  war  were  not,  as  it  is,  a  most 
terrible  fact.  When  saying  this  I  have  not  the  least  idea  of  impairing 
our  business  links  with  Europe.  For  years  and  years  we  have  had 
the  best  friendly  relations  with  Europe,  and  received  from  it  finan- 
cial support,  which  has  largely  and  efficiently  contributed  to  our  own 
progress. 

Now,  Mr.  President,  before  I  finish,  allow  me  to  say  that  the  de- 
velopment of  the  different  nations  of  Latin  America  and  the  exploita- 
tion of  the  unlimited  resources  concealed  in  them  are  problems  still 
pending,  problems  of  the  near  future.  Time  is  ripe  for  cooperation, 
and  it  seems  rather  strange  that  this  word  "  cooperation "  should 
sound  as  a  novelty  in  the  relations  of  Americans  with  Americans. 
Let  us  hope,  ladies  and  gentlemen,  this  cooperation  will  be  efficient, 
will  be  real  and  practical.  Let  us  hope  that  from  this  conference 
something  may  come  which  will  promote  our  prosperity  at  home  and 
extend  the  trade  between  the  United  States  and  Latin  America  with 
reciprocal  benefit ;  let  us  hope  that  our  deliberation  will  not  diminish 

98257°— 15 7 


98  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

and  will,  on  the  contrary,  add  new  strength,  in  this  hour  of  tre- 
mendous commotion  for  mankind,  to  the  great  moral  force  of  a  united 
America.  [Great  applause.] 

Secretary  McADOO.  Ladies  and  gentlemen,  I  have  the  honor  of  in- 
troducing Dr.  Santiago  Perez  Triana,  of  Colombia. 

ADDRESS  OF  HON.  SANTIAGO  PEREZ  TRIANA,  OF  COLOMBIA. 

MR.  PRESIDENT,  LADIES,  AND  GENTLEMEN  : 

The  American  peoples  that  have  constituted  themselves  into  free 
and  independent  nations  are  gathered  here  by  their  legitimate  repre- 
sentatives. I  use  the  patronymic  "American  "  in  the  full  radiance  of 
its  continental  integrity,  covering  North,  Central,  and  South. 

These  peoples  have  met  here,  or  are  meeting,  in  an  errand  of  peace 
that,  in  ordinary  circumstances,  would  be  part  of  the  day's  work. 
But  the  circumstances  of  history  in  the  assembled  background  make 
this  work  of  peace  appear  like  a  dream  of  light,  which  is  both  a 
revelation  of  the  past,  as  it  is,  and  is  clothed  in  the  hues  of  prophecy 
for  the  future.  [Applause.] 

This  meeting  coincides  with  a  lurid  moment  of  history,  when,  alas, 
by  the  inscrutable  dispensation  of  Providence,  the  greatest  nations 
in  the  world  across  the  ocean  are  bent  on  errands  that  are  not  of 
peace.  All  their  thoughts,  all  passions,  all  endeavors,  tend  to 
slaughter  and  destruction. 

And  against  that  background  the  continent  of  America  calmly  and 
serenely  proceeds  in  its  work  of  peace. 

It  is  not  for  us  to  view  the  facts  in  a  spirit  of  censorious  arrogance. 
It  is  for  us  to  thank  Providence  deeply  and  reverently  for  the  merci- 
ful dispensation  to  realize  that  this  could  not  have  been  accomplished 
by  fortuitous  circumstances  alone.  It  is  the  result  of  the  work  of  the 
founders  of  liberty  and  emancipation  in  America.  The  seed  that  they 
planted  has  grown  throughout  the  continent,  and  we,  who  have  re- 
ceived that  glorious  inheritance,  at  this  terrible  moment  of  history 
have  as  our  first  and  foremost  duty  to  prove  that  we  are  deserving  of 
the  inheritance  that  they  left  to  us  and  that  we  will  carry  it  on. 
[Applause.] 

Law  and  order,  and  the  concepts,  and  the  conventions  for  which 
humanity  has  labored  since  the  beginning  of  time  are  destroyed  in 
an  hour  in  the  countries  across  the  ocean.  But  in  the  meantime  law 
and  order  have  found  their  refuge  in  America.  We  are  the  trustees 
of  the  liberties  of  the  world  and  the  guardians  of  the  future. 

Let  us  do  our  duty.  Not  only  the  United  States,  as  was  once  said 
by  lips  hallowed  by  martyrdom,  were  conceived  in  liberty  and  dedi- 
cated to  freedom ;  that  is  the  glorious  heritage  of  all  the  nations  of 
America.  Whatever  tends  to  unite  those  nations  in  common  bonds 
of  friendship,  of  common  interest  or  sympathy;  whatever  tends  to 


PROCEEDINGS.  99 

strengthen  their  solidarity  is  a  work  not  only    for    the    peace  of 
America  but  for  the  peace  of  the  world. 

Such  is  this  Conference.  May  God  grant  that  it  succeed !  [Great 
applause.] 

Secretary  McADOO.  I  regret  to  say  that  Dr.  Guardia  is  ill.  The 
Honorable  John  M.  Keith  will  respond  for  him  in  behalf  of  the 
Republic  of  Costa  Rica.  I  have  the  honor  of  introducing  Mr.  Keith. 

ADDRESS  OF  HON.  JOHN  M.  KEITH,  OF  COSTA  RICA. 

MR.  PRESIDENT,  LADIES,  AND  GENTLEMEN  : 

Replying  to  the  cordial  expressions  of  welcome  extended  by  Your 
Excellency,  in  the  name  of  the  delegation  of  Costa  Rica  I  have  to 
express  the  hope  that  the  high  practical  aims  of  this  Conference 
will  be  fully  realized  in  cementing  a  new  bond  of  union  and  a  better 
mutual  understanding  between  the  Americas. 

We  believe  that  a  new  economic  dawn  is  inaugurated  for  the  wel- 
fare of  Latin  America,  in  which  we  desire  to  participate.  As  an  evi- 
dence of  this  desire  the  Government  of  Costa  Rica  has  honored  me, 
an  American-born  citizen,  as  one  of  its  delegates. 

Over  thirty  years'  residence  in  Latin  America  qualifies  me  to 
express  the  conviction  that  a  firm  faith  in  its  future  progress  and 
development  is  justified  by  what  it  has  accomplished  in  the  past. 

Speaking  with  special  reference  to  the  Tropical  Zone,  contained 
between  the  tenth  and  twelfth  degrees  of  latitude  north  and  south  of 
the  equator,  which  embraces  so  large  a  portion  of  South  and  Central 
America,  no  part  of  the  hemisphere  can  show  a  civilization  as  high 
as,  or  even  comparable  with,  that  attained  by  the  genius  of  the  Latin 
race — a  civilization  realized  in  the  face  of  almost  insurmountable 
•physical,  climatic,  and  ethnological  conditions.  Four  centuries  of 
constructive  social  and  political  endeavor  have  prepared  Latin 
America  to  reap  the  benefit  of  the  economic  development  which  its 
geographical  position  and  natural  resources  indicate. 

The  delegation  of  Costa  Rica  expresses  its  deep  appreciation  of 
the  hospitalities  extended  by  your  Government,  and  again  voices 
its  concurrence  with  the  aims  and  purposes  of  this  Conference. 
[Great  applause.] 

Secretary  McADOO.  I  have  the  honor  to  present  to  the  Conference 
Dr.  Pablo  Desvernine  y  Goldos,  of  Cuba. 

ADDRESS  OF  HON.  PABLO  DESVERNINE  Y  GALD6S,  OF  CUBA. 

Mr.  PRESIDENT,  LADIES,  AND  GENTLEMEN  : 

I  am  perhaps  the  only  one  who  has  been  taken  somewhat  unawares, 
but  my  understanding  is  that  the  only  thing  that  we  were  called  upon 


100  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

to  do  was  to  respond,  and  the  only  way  to  respond  was  to  give  thanks 
to  the  President  of  the  United  States  for  the  kind  words  with  which 
he  has  received  us.  I  therefore  have  to  acknowledge  here  my  com- 
plete unpreparedness  to  say  anything  else,  but  to  indorse  and  approve, 
as  Mr.  Bryan  says,  the  noble  and  generous  words  pronounced  by  the 
President  of  the  United  States.  [Applause.] 

This  is  more  than  the  commencement  of  the  economic  part  of  the 
Conference.  It  is,  I  conceive,  a  sort  of  eucharistic  feast,  in  which  we 
come  to  offer  you  our  thanks  for  what  you  have  done  for  us,  and  that 
vouches  for  the  success  of  the  Conference  also,  because  by  persistently 
thinking  along  one  line  action  often  results  therefrom.  Action  once 
begun,  success  in  such  undertakings  as  this  is  almost  invariably  as- 
sured; and  this  success  means  closer  friendly  and  commercial  rela- 
tions between  the  countries  of  the  western  world. 

I  wish  to  add,  Mr.  President,  that  I  have  just  been  told  that  the 
name  of  this  room  is  the  "  Hall  of  the  Americas."  This  plural  form 
is  emblematic.  This  hall's  solid  marble  symbolizes  the  permanence 
of  the  friendship  of  the  American  nations  among  themselves. 

Before  finishing,  gentlemen,  I  wish  to  say,  renewing  the  recollection 
of  something  I  had  the  pleasure  to  express  a  few  days  ago,  that  it  is 
certainly  a  great  contrast  that  while  our  countries  of  America  are 
trying  to  settle  their  problems  in  such  a  conference  as  this  and  are 
trying  by  words  of  mutual  friendship  and  good  will  to  prepare  them- 
selves for  the  present  and  future,  in  other  parts  of  the  world  these 
same  questions  have  led  nations  into  a  most  bloody  war.  The  reason 
may  be  that  all  of  us  recognize  that  in  the  entire  continent  of  America 
there  is  one  purpose  of  political  policy,  so  to  speak,  and  that  that 
unity  of  purpose  is  the  solid  guaranty  for  our  united  political  action 
in  the  direction  of  peaceful  commercial  intercourse. 

In  regard  to  the  intentions  and  motives  that  animate  all  of  us  here1 
it  is  certain  that  they  are  disinterested,  since  our  only  desire  is  to 
agree  on  closer  friendly  relations  among  all  the  nations  of  America, 
and  in  this  respect  let  me  close  with  the  following  remark : 

Gentlemen  of  Central  and  South  America  and  representatives  from 
the  United  States,  if  you  wish  to  know  what  the  United  States  means 
to  America,  if  you  want  to  know  what  their  political  program  is  in 
regard  to  the  American  nations,  please  look  at  the  example  they  have 
set  there  in  the  midst  of  the  Gulf,  at  the  Pearl  of  the  Antilles,  and  see 
what  they  have  done  for  Cuba  and  what  they  have  accomplished 
there  [applause],  and  that  pearl  in  its  beautiful  setting  will  cer- 
tainly be  a  guaranty  for  all  of  us  that  only  friendship  and  affection 
can  bind  the  United  States  to  the  other  nations  of  America.  [Pro- 
longed applause.] 


PROCEEDINGS.  101 

Secretary  McADOo.  I  have  the  honor  to  present  to  the  Conference 
Dr.  Francisco  J.  Peynado,  of  the  Dominican  Republic. 

ADDRESS  OF  HON.  FRANCISCO  J.  PEYNADO,  OF  THE  DOMINICAN 

REPUBLIC. 

MR.  PRESIDENT,  LADIES,  AND  GENTLEMEN  : 

Once  more  those  laws  which  control  the  material,  moral,  and  intel- 
lectual approximation  of  social  groups  pursuing  common  ideals  have 
worked  their  spell,  and  this  in  spite  of  differences  which  at  times  the 
prejudice  of  human  nature  brings  about. 

The  peoples  of  North,  Central,  and  South  America,  notwithstand- 
ing many  errors  committed  in  the  past,  and  notwithstanding  the 
prejudices  which  have  brought  those  mistakes  into  being,  have  now 
reached  a  frank  and  honest  understanding,  impelled  by  a  great 
movement  of  reciprocal  attraction ;  and,  in  virtue  of  those  laws,  these 
peoples  at  no  distant  date  will  necessarily  form  themselves  into  a 
family  of  nations  whose  democratic  institutions,  whose  love  of  and 
honor  for  work,  and  whose  honest  obedience  to  the  law  of  coopera- 
tion, strengthened  by  a  common  ideal  of  independence  and  sover- 
eignty, will  offer  the  finest  tribute  to  civilization  which  the  mind 
and  the  heart  of  man  can  offer. 

To-day  the  young  nations  of  this  very  rich  continent  find  them- 
selves face  to  face  with  a  wrar  never  before  equalled;  but  the  ideals 
of  justice  cover  them  with  a  shield  of  peace.  Beneath  this  protec- 
tion they  are  entering  with  full  vigor  into  a  new  era  of  law  and 
order;  and,  throbbing  with  enthusiasm,  they  have  accepted  the 
praiseworthy  initiative  of  the  Government  of  the  United  States  to 
unite  in  a  congress  to  settle  by  common  action  certain  transcendental 
problems  which  for  some  time  have  faced  us,  but  which  have  been 
turned  by  the  European  war  into  problems  demanding  definite  and 
immediate  solution. 

It  is  natural,  therefore,  that  the  Dominican  Government,  inter- 
preting clearly  the  lofty  spirit  which  actuates  this  movement,  would 
not  hesitate  to  send  its  representatives  to  contribute,  to  the  fullest 
limits  of  their  power,  to  the  success  of  the  labors  of  this  conference ; 
and  this  they  solemnly  promise  to  do. 

The  Dominican  delegation  felicitates  itself  on  this  account  and 
offers  on  behalf  of  its  Government  the  heartiest  congratulations  to 
the  Government  of  the  United  States,  and  likewise  to  you,  Mr.  Presi- 
dent, and  to  your  brilliant  collaborators.  [Great  applause.] 


102  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

Secretary  McAooo.  I  have  the  honor  to  present  to  you  Dr.  Juan 
Cueva  Garcia,  of  the  Republic  of  Ecuador. 

ADDRESS  OF  HON.  JUAN  CUEVA  GARClA,  OP  ECUADOR. 

MR.  PRESIDENT,  LADIES,  AND  GENTLEMEN  : 

From  the  majestic  white  crowns  of  our  double  avenue  of  volcanoes; 
from  the  greatest  plateau  of  the  world,  where  at  an  altitude  of  6,000 
to  9,000  feet  labor  the  great  mass  of  our  population ;  from  the  ardent 
coast,  glorious  with  flowers,  fruits,  cocoa,  coffee,  rubber,  ivory,  and 
nuts,  and  straw  for  Panama  hats;  from  that  coast,  exceptionally 
endowed  with  the  most  marvelous  system  of  rivers,  still  unknown  to 
this  country,  I  am  bringing,  sir,  a  message  of  sincere  friendship  to 
this  sister  Republic  and  a  personal  one  of  respect  and  admiration  for 
Your  Excellency.  [Applause.] 

While  the  most  horrible  war  devastates  the  flourishing  nations 
of  the  Old  World,  your  Government  has  called  this  vast  continent, 
new  in  the  life  of  civilization,  and  rising  up  with  'great  forces  and 
ideals,  to  the  action  of  peace,  work,  commerce,  and  fraternity. 
And  the  whole  continent,  en  masse,  has  answered  your  call,  send- 
ing us  north  as  a  symbol  of  friendship,  as  the  earnest  expression 
of  our  sincere  desire  to  enjoy  closer  relations  among  the  commu- 
nities forming  the  American  family.  Born  in  this  country  of  yours 
3,000  miles  from  Europe,  with  a  great  and  constant  immigration, 
with  an  endless  rolling  land  back  of  you,  with  every  facility  to 
build  your  roads,  and  for  general  development,  your  fellow  coun- 
trymen will  never  realize  how  difficult  every  step  of  our  civiliza- 
tion has  been  for  us.  And  it  is  under  these  circumstances,  without 
any  of  the  helps  that  you  have  had  on  the  other  side  of  the  Panama 
Canal,  with  so  many  obstacles,  geographical,  topographical,  and  cli- 
matical,  in  the  land  where  creation  is  still  in  full  action,  in  astounding 
and  incessant  production  of  life  and  death ;  it  is  under  these  circum- 
stances that  we,  the  inhabitants  of  Ecuador  (Ecuador  means  "  the 
Equator")  under  the  straight  rays  of  the  sun,  have  become  the  lead- 
ers of  the  cocoa  trade  of  the  world,  have  built  our  world-wide  indus- 
try of  hats,  improperly  named  Panama  hats. 

When  history  does  justice  to  our  efforts  it  will  tell  of  our  faith 
and  strength  in  the  battle  for  civilization,  and  whether  or  not  we 
acted  well  under  the  circumstances  with  which  we  had  to  contend. 
In  the  meanwhile  here  we  are,  sir,  ready  to  further  any  effort  that 
may  mean  a  sincere  understanding  among  all,  and  for  the  benefit  of 
all.  Let  us  build  the  harmony  of  this  continent  in  justice,  in  honesty 
of  mind  and  action.  Let  these  virtues  by  means  of  united  effort  restore 
the  mutual  confidence  so  much  needed  in  these  sister  Republics,  in 


PROCEEDINGS.  103 

order  that  we  may  employ  our  combined  effort  in  the  common  welfare 
of  the  continent. 

In  the  name  of  Ecuador  I  salute  the  people  of  the  United  States, 
and  in  the  name  of  my  Government  I  wish  Your  Excellency  long 
years  of  happiness  amidst  your  fellow  countrymen,  surrounded  by  the 
love  and  respect  and  admiration  that  you  so  greatly  deserve.  [Great 
applause.] 

Secretary  McAooo.  I  have  the  honor  of  introducing  Dr.  Victor 
Sanchez  Ocana,  of  Guatemala. 

ADDRESS  OF  HON.  VICTOR  SANCHEZ  OCANA,  OF  GUATEMALA. 

MR.  PRESIDENT,  LADIES,  AND  GENTLEMEN  : 

Guatemala  hastened  to  accept  the  invitation  which  Your  Excel- 
lency's Government  so  kindly  extended  it  to  be  represented  at  this 
Conference  not  only  on  account  of  the  cordial  friendship  it  has  ever 
cultivated  with  this  prosperous  Republic — which  moves  us  to  accept 
forthwith  its  every  initiative  on  behalf  of  the  brotherhood  and 
progress  of  the  other  peoples  of  this  continent — but  because  the  sub- 
ject matter  of  the  Conference  is  such  as  awakens  the  sympathy  and 
interest  of  Guatemala  by  reason  of  its  vital  importance  and  of  the 
benefits  to  be  reaped  by  the  country  I  represent  in  the  full  develop- 
ment of  its  resources  through  the  aid  and  cooperation  of  her  sister 
Republics  of  America  in  a  labor  of  commercial  approximation  and 
common  financial  benefits. 

The  delegation  of  Guatemala  has  accordingly  come  to  place  its 
modest  contribution  at  the  service  of  this  Conference,  which  holds  out 
so  much  hope  for  the  interests  of  the  continent. 

The  Guatemalan  delegation,  in  presenting  its  respectful  greetings 
to  the  illustrious  first  citizen  of  this  great  American  Nation  and  in 
expressing  once  again  its  sentiments  of  gratitude  for  the  welcome  it 
has  received,  voices  the  hope  that  the  fullest  measure  of  success  shall, 
attend  the  efforts  of  the  Conference,  at  which  are  gathered  so  many 
distinguished  men  of  the  three  Americas.  [Loud  applause.] 

Secretary  McADOO.  I  have  the  honor  of  introducing  Dr.  Leopoldo 
Cordova,  of  Honduras. 

ADDRESS  OF  HON.  LEOPOLDO  CORDOVA,  OF  HONDURAS. 

MR.  PRESIDENT,  LADIES,  AND  GENTLEMEN  : 

The  delegation  of  Honduras  takes  great  pleasure  in  acknowledg- 
ing the  welcome  with  which  His  Excellency  the  President  of  this 
Republic  has  honored  it,  and  hopes  that  this  Conference,  actuated  by 


104  PAN  AMERICAN   FINANCIAL  CONFERENCE. 

a  spirit  essentially  American,  may  be  fruitful  in  results  for  the 
financial  interests  of  our  small  nation. 

Honduras,  Mr.  President,  has  been  the  victim  of  frequent  political 
upheavals,  and  she  needs  the  help  of  a  powerful  sister  nation  such  as 
the  United  States  in  order  that  she  may  enter  fully  into  the  path  of 
order  which  is  the  foundation  of  all  progress. 

On  behalf  of  the  Government  and  of  the  people  of  Honduras  we 
renew  our  warmest  thanks  to  the  Government  of  the  United  States 
for  the  many  courtesies  we  have  received  ever  since  our  arrival  to 
this  country.  [Loud  applause.] 

Secretary  McADOo.  I  have  the  honor  of  introducing  Dr.  Pedro 
Rafael  Cuadra,  of  Nicaragua. 

ADDRESS  OF  HON.  PEDRO  RAFAEL  CUADRA,  OF  NICARAGUA. 

MR.  PRESIDENT,  LADIES,  AND  GENTLEMEN  : 

It  is  an  honor  for  me,  Mr.  President,  to  greet  Your  Excellency  on 
such  an  occasion  as  this,  in  the  name  of  the  Government  and  people 
of  Nicaragua.  The  ideals  sought  in  this  gathering  of  the  leading 
financiers  of  America  are  nearly  the  same  as  those  my  Government  has 
been  endeavoring  for  some  time  to  realize.  We  have  come  here,  be- 
fore now,  seeking  closer  economic  relations  between  our  two  coun- 
tries, and  I  am  most  sincere  in  stating  that  we  have  great  pride  in 
following  the  leadership  of  this  great  people,  whose  ideals  of  service 
to  humanity  we  so  much  admire.  And  for  this  reason  my  country 
confidently  expects  that  our  desired  ends  will  be  attained  through 
the  present  Pan  American  Financial  Conference. 

Permit  me,  in  conclusion,  to  express  our  thankfulness  for  your 
kind  invitation  to  come  here  and  look  for  the  best  means  of  fulfilling 
these  high  ideals.  [Loud  applause.] 

Secretary  McAooo.  I  have  the  honor  of  introducing  Dr.  Ramon  F. 
Acevedo,  of  Panama. 

ADDRESS  OF  HON.  RAMON  F.  ACEVEDO,  OF  PANAMA. 

MR.  PRESIDENT,  LADIES,  AND  GENTLEMEN  : 

The  delegation  of  Panama  to  the  Pan  American  Financial  Confer- 
ence highly  appreciates  the  expressions  of  welcome  which  it  has  just 
heard  from  the  lips  of  the  First  Magistrate  of  this  great  country, 
and  in  the  name  of  the  Government  and  people  of  Panama  it  wishes 
to  render  the  most  sincere  thanks  for  the  invitation  to  take  part  in 
this  Conference,  which  will  be  memorable  on  account  of  the  historical 
epoch  in  which  it  takes  place  and  for  the  beneficial  results  which 
undoubtedly  will  be  derived  from  it. 


PEOCEEDINGS.  105 

The  political  and  economic  interests  of  the  Republic  of  Panama 
are  intimately  and  perpetually  bound  to  those  of  the  United  States, 
and  the  delegation  of  Panama  has  the  hope  that  this  great  Conference 
will  produce  between  the  two  countries  still  closer  relations,  founded 
not  only  on  those  common  interests  but  also  on  the  spirit  of  full  and 
generous  justice  of  the  American  Nation,  and  which  are  to  prevail 
between  all  the  Republics  on  this  continent,  called  to  be  the  center 
of  a  new  and  flourishing  civilization. 

You  have  laid  the  corner  stone  of  a  building  that  promises  to  be 
the  magnificent  temple  of  harmony  and  prosperity;  let  us  all  co- 
operate with  the  best  of  our  energies  to  its  construction  and  com- 
pletion in  the  hope  that  it  may  last  for  years  and  years.  [Loud 
applause.] 

Secretary  McADOO.  I  have  the  honor  of  introducing  Dr.  Hec- 
tor Velazquez,  of  Paraguay. 

ADDRESS  OF  HON.  HECTOR  VElAZdUEZ,  OF  PARAGUAY. 

MR.  PRESIDENT,  LADIES,  AND  GENTLEMEN: 

It  is  the  occasion  of  sincere  personal  gratification,  this  distin- 
guished honor  of  being  designated  to  represent  my  country  before 
this  illustrious  and  impressive  assembly,  in  which  the  most  experi- 
enced thinkers  and  experts  of  America  in  the  financial  and  economic 
sciences  have  been  called  together  with  the  momentous  purpose  of 
establishing  a  solid  foundation  for  our  commercial  life,  for  blazing 
the  trails  that  are  to  lead  us  to  the  realization  of  our  constant  and 
heartfelt  longings. 

A  great  and  powerful  Nation — rich  in  material  progress  as  in  the 
noble  sentiments  treasured  in  the  hearts  of  its  people — has  invited  its 
sister  Republics  of  this  continent  to  discuss  problems  of  the  highest 
importance,  interesting  to  all  alike,  whose  solution  will  be  vitally 
influential  for  our  common  progress,  for  international  confraternity, 
for  the  harmonizing  of  aspirations  and  ideals,  the  only  permanent 
foundation  for  true  Pan  Americanism,  which  we  so  earnestly  seek 
and  which  we  are  beginning  to  realize. 

This  act  of  the  Government  of  the  United  States  is  a  step  in  ad- 
vance, brilliant  and  vigorous,  destined  to  give  fresh  impetus  to  the 
endeavor,  persevering  and  each  time  more  earnest,  to  dissipate 
jealousies  and  doubts;  to  waft  away  the  mists  that  in  the  sky  of  this 
continent  might  obscure  or  retard  the  consummation  pictured  by 
statesmen  of  great  and  noble  heart  of  all  ages  for  our  beloved  Amer- 
ica ;  to  bring  about  loyal  collaboration.,  with  a  clear  and  frank  under- 
standing, for  the  progress  and  well-being  of  all;  and  especially  for 
the  attainment  morally  of  the  highest  ideals  that  humanity  ever  pur- 


106  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

sues  and  pledges  itself  to  crystallize  into  fundamental  principles 
that  in  practical  life  will  serve  as  a  guide  to  its  boundless  culture 
and  improvement. 

The  work  of  Blaine,  of  Root,  of  Bryan,  of  all  the  other  spokes- 
men of  the  administrations  and  of  the  people  of  this  Republic,  has 
ever  received  harmonious  acknowledgment  among  her  sister  Latin 
American  Republics,  and  the  personnel  of  this  Congress,  the  happiest 
and  most  opportune  among  like  inspirations,  is  proof  anew  of  the 
cordial  and  enthusiastic  manner  in  which  they  have  responded  once 
more  to  the  courteous  call. 

The  Government  of  Paraguay  contemplates  with  genuine  satisfac- 
tion the  celebration  of  this  assembly,  convinced  that  its  deliberations 
will  shed  a  clear  light  on  the  path  that  in  the  economic  field  the 
Republics  of  America  shall  follow,  particularly  those  which,  as  my 
country,  have  scarcely  begun  the  development  of  their  natural 
resources. 

Situated  in  fact  in  the  very  heart  of  South  America,  within  the 
confines  of  the  Temperate  Zone  and  on  the  border  of  the  Torrid 
Zone;  wyith  a  mild  climate,  of  universal  renown  for  its  incomparable 
salubrity;  with  soil  of  the  greatest ' fertility ,  traversed  by  innumer- 
able rivers  and  other  streams  that  constitute  her  natural  irrigation ; 
adapted  to  the  cultivation  of  almost  every  tropical  and  subtropical 
product,  and  for  the  breeding  and  fattening  of  numerous  herds 
of  cattle;  with  her  primeval  forests,  in  great  part  yet  virgin,  in 
which  are  found  the  rarest  woods  for  the  builder  and  for  the  cabinet- 
maker; with  the  mineral  wealth  of  her  mountains  and  hills  hardly 
touched ;  with  the  enchanting  perspectives  of  her  lakes  and  prairies, 
attracting  lovers  of  beauty  and  health — Paraguay  is  yet  awaiting 
the  intelligence,  the  capital,  the  energy,  that  are  to  convert  the  nat- 
ural wealth  with  which  she  is  endowed  into  elements  of  life  and  cul- 
ture for  a  numerous  population  and  for  humanity. 

Honored  in  expressing  in  the  name  of  my  Government  its  sincere 
hopes  for  the  success  of  the  deliberations  of  this  Congress,  so  aus- 
piciously initiated,  permit  me  to  join  with  them  my  personal  wishes 
and  those  of  my  associate  delegate,  the  consul  general,  Mr.  William 
Wallace  White.  [Loud  applause.] 

Secretary  McAooo.  I  have  the  honor  of  introducing  Dr.  Isaac 
Alzamora,  of  Peru. 

ADDRESS  OF  HON.  ISAAC 'ALZAMORA,  OF  PERU. 

YOUR  EXCELLENCY  AND  LADIES  AND  GENTLEMEN  : 

The  delegation  of  Peru  highly  appreciates  the  kind  welcome  ex- 
tended by  the  First  Magistrate  of  this  great  Republic,  and  is  happy 
to  be  able  to  avail  itself  of  this  opportunity  to  convey  to  the  Govern- 


PROCEEDINGS.  107 

ment  and  the  people  of  the  United  States  the  most  friendly  greetings 
from  the  Government  and  people  of  Peru. 

The  Peruvian  delegation  will  at  all  times  give  its  earnest  attention 
and  consideration  to  the  ideas  so  felicitously  expressed  by  Your 
Excellency  respecting  the  object  of  this  Conference,  and  will  feel 
much  honored  in  cooperating  to  the  practical  realization  thereof, 
as  far  as  is  compatible  with  the  present  conditions  in  Peru. 

The  wishes  of  Your  Excellency  for  the  welfare  of  the  Republics 
represented  in  this  conference  are  sincerely  echoed,  as  far  as  my 
country  is  concerned,  by  every  Peruvian  citizen,  who  now,  as  in  the 
past,  desires  only  the  continued  and  uninterrupted  progress  and 
prosperity  of  this  Nation,  as  well  as  the  personal  happiness  of  its 
honored  President.  [Loud  applause.] 

Secretary  McADOO.  I  have  the  honor  of  introducing  Dr.  Alfonso 
Quinonez  M.,  of  Salvador. 

ADDRESS  OF  HON.  ALFONSO  QUINONEZ  M.,  OF  SALVADOR. 

YOUR  ExcELLENcr,  LADIES,  AND  GENTLEMEN  : 

The  delegation  of  Salvador  has  the  honor  to  offer  its  most  respect- 
ful greeting  to  His  Excellency  the  President  of  the  United  States, 
to  His  Excellency  the  Secretary  of  the  Treasury,  and  to  the  honorable 
delegates  of  the  American  Republics  attending  this  Financial  Con- 
ference. 

This  delegation  gladly  acknowledges  its  gratitude  to  the  high 
public  officials  and  to  the  commercial  organizations  of  the  United 
States  for  the  many  attentions  with  wyhich  it  has  been  favored  since 
its  arrival. 

The  Government  of  Salvador  looks  upon  the  invitation  of  the 
American  Government  to  this  Conference  as  a  signal  honor,  and  it 
hopes  that  its  results  may  be  converted  into  practical  benefits  for 
the  commercial  relations  of  the  two  countries. 

The  remarks  of  His  Excellency  the  President  of  the  United  States 
and  of  the  Honorable  Secretary  of  State,  and  the  ceremony  which 
we  are  attending  to-day  are  a  sure  guaranty  of  the  success  and  bene- 
ficial results  of  this  Conference  for  the  countries  of  Central  and 
South  America. 

The  Republic  of  Salvador,  although  small  territorially,  is  thickly 
populated,  and  has  progressive  industrial  and  commercial  tendencies. 
The  Government  and  people  of  Salvador,  whose  representatives  we 
have  the  honor  to  be,  accordingly  express  the  most  ardent  desires  for 
the  ever-increasing  growth  of  the  commercial  relations  between  the 
United  States  and  the  other  American  Republics,  and  warmly  ap- 


108  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

plaud  this  most  opportune  and  happy  initiative  of  the  Government 
of  the  United  States.     [Loud  applause.] 

Secretary  McAooo.  I  have  the  honor  of  introducing  Dr.  Pedro 
Cosio,  of  Uruguay. 

ADDRESS  OF  HON.  PEDRO  COSIO,  OF  URUGUAY. 

MR.  PRESIDENT,  LADIES,  AND  GENTLEMEN  : 

Uruguay  has  accepted  the  invitation  of  the  United  States  to  take 
part  in  the  Financial  Conference  in  Washington  with  a  full  under- 
standing of  the  far-reaching  importance  which  a  solution  of  the 
problems  of  exchange  caused  by  the  European  war  will  bring  about 
for  the  American  Continent. 

But  first  I  wish  to  state,  Mr.  President,  that  Uruguay  has  re- 
sponded to  this  invitation  principally  on  account  of  the  feeling  of 
understanding  and  of  admiration  which  the  American  people  and 
their  worthy  representatives  in  the  government  deserve  at  the  hands 
of  the  people  of  my  country. 

Economic  interests  are,  owing  to  their  very  nature,  removed  from 
the  mere  friendships  between  one  country  and  another,  since  the 
economic  life  is  regulated  by  inevitable  laws  of  social  dynamics. 
However,  it  is  a  fact  evidenced  by  every  epoch  of  history  that  har- 
mony of  interest  between  countries  is  the  most  solid  basis  for  good 
relations,  in  the  same  manner  that  commercial  rivalry  is  the  most 
efficient  dissolving  force  which  hinders  the  natural  human  tendency 
toward  the  brotherhood  of  man. 

The  purpose  of  the  Government  of  the  United  States  in  calling  this 
Financial  Congress  can  not  be  considered  as  other  than  inspired  by 
high  and  generous  motives  of  foresight,  tending  to  consolidate  and 
to  guarantee  effectually  for  the  future  the  excellent  friendly  relations 
which  to-day  unite  the  countries  of  the  two  Americas. 

The  leading  men  of  the  United  States  have  been  characterized  in 
the  past,  and  particularly  in  these  latter  days,  for  their  tendencies 
against  the  barbaric  solution  by  warfare.  There  could  be  nothing 
more  logical,  therefore,  in  this  generous  creed  than  to  prepare  an  at- 
mosphere favorable  to  the  permanence  of  peace  between  the  nations 
of  America,  which  should  use  their  energies  in  the  constructive  work 
of  extending  their  own  greatness. 

If  the  Financial  Conference  increases  economic  ties  and  harmonizes 
commercial  interests  between  the  countries  of  America,  as  it  surely 
will,  your  work,  Mr.  President,  will  project  itself  indefinitely  into 
the  future,  to  the  moral  and  material  benefit  of  the  American  peoples. 
[Loud  applause.] 


PROCEEDINGS.  109 

Secretary  McADOo.  I  have  the  honor  of  introducing  Dr.  Pedro 
Rafael  Rincones,  of  the  Republic  of  Venezuela. 

ADDRESS  OF  HON.  PEDEO  RAFAEL  RINCONES,  OF  VENEZUELA. 

MR.  PRESIDENT,  LADIES,  AND  GENTLEMEN  : 

By  a  benevolent  act  of  my  Government  I  have  had  the  honor  to  be 
appointed  its  representative  at  .this  Pan  American  Financial  Confer- 
ence, which  has  just  been  inaugurated  in  the  presence  of  the  distin- 
guished gathering  here  assembled. 

It  is  the  earnest  hope  of  the  Venezuelan  delegation  that  the  out- 
come of  the  proceedings  of  this  important  meeting  shall  fulfill  the 
expectations  of  us  all  in  bringing  about  a  still  closer  mutual  under- 
standing in  our  commercial  relations  with  far-reaching  effects  for 
the  American  States  so  worthily  represented  at  this  Conference. 

We  are  deeply  indebted  for  the  kindly  welcome  and  courtesies 
extended  to  us  by  the  entertainment  committee  appointed  by  the 
honorable  the  Secretary  of  the  Treasury  of  the  United  States  and 
presided  over  by  Mr.  Dudley  Field  Malone.  He  is  a  fine  type  of  the 
true  American  gentleman,  and  his  distinguished  wife  typifies  the 
grace  and  sweetness  which  has  made  the  American  woman  famous. 

We  appreciate  most  highly  the  amiable  words  of  welcome  uttered 
by  the  First  Magistrate  of  this  great  Nation,  and  in  behalf  of  my 
Government  as  well  as  in  my  own  name  it  is  gratifying  for  me  to 
express  the  best  wishes  for  the  continued  prosperity  of  the  United 
States  of  America  and  for  the  welfare  of  its  President,  who  seems 
to  be  inspired  by  the  noble  characteristics  of  one  of  his  great  prede- 
cessors which  made  him  a  man  "with  malice  towards  none,  with 
charity  for  all."  [Loud  applause.] 

Secretary  McAooo.  The  Conference  will  now  take  a  recess  until 
2.30  o'clock  p.  m. 

I  wish  to  announce  that  the  President  of  the  United  States  will 
receive  all  of  the  guests,  ladies  and  gentlemen,  who  are  here,  a>t  the 
White  House  during  the  recess  to-day. 

(At  this  point  a  recess  was  taken.) 


SECOND  SESSION 


MONDAY  AFTERNOON,  MAY  24.  1915 


111 


SECOND  SESSION,  MONDAY  AFTERNOON,  MAY  24. 


The  conference  was  called  to  order  at  2.30  o'clock  p.  m.  by  the 
chairman. 

ADDRESS  OF  THE  HON.  WILLIAM  G.  McADOO,  SECRETARY  OF  THE 
TREASURY  OF  THE  UNITED  STATES. 

FELLOW  AMERICANS: 

Permit  me  to  express  the  intense  satisfaction  and  gratification  of 
the  Government  and  people  of  the  United  States  at  the  cordial  and 
hearty  response  of  the  Governments  of  South  and  Central  America 
to  the  call  of  the  United  States  for  this  Financial  Conference.  The 
people  of  the  United  States  are  profoundly  honored  by  the  presence 
here  to-day  of  so  many  distinguished  men  from  South  and  Central 
America — men  whose  character  and  achievements  have  put  them  in 
the  front  rank  of  citizenship  in  their  respective  countries.  Nothing 
could  more  eloquently  testify  to  the  importance  of  this  notable  gath- 
ering than  the  distinction  with  which  it  has  been  impressed  by  the 
character  and  quality  of  our  foreign  guests,  and  it  may,  with  equal 
truth,  be  said  that  the  character  of  the  able  and  distinguished  men  of 
the  United  States  who  are  participating  in  these  deliberations  is 
evidence  of  the  great  importance  with  which  this  Conference  is 
regarded  by  the  Government  and  people  of  the  United  States.  [Ap- 
plause.] 

We  extend  to  you  cordial  greetings  and  hearty  welcome,  and 
earnestly  hope  that  your  visit  to  the  United  States  may  be  fruitful 
in  practical  results,  advantageous  to  your  countries,  and  replete  with 
happiness  for  yourselves. 

International  conferences  of  various  kinds  in  different  parts  of  the 
world  have  been  held  in  times  past,  and  this  is  not  the  first  conference 
between  the  Eepublics  of  the  American  Continent.  The  Pan  Amer- 
ican Union  is  the  result  of  one  of  these  conferences,  and  is  a  tribute 
to  the  vision  and  statesmanship  of  the  great  leaders  of  the  Western 
Hemisphere.  But  never  before  has  there  been  assembled  an  inter- 
national conference  of  such  peculiar  significance  as  this  one.  We 
meet  at  a  time  when  more  than  half  the  world,  in  population  and 
territorial  area,  is  engaged  in  a  colossal  conflict,  destructive  of  life 

113 

98257°— 15 8 


114  PAN   AMEKICAN   FINANCIAL   CONFERENCE 

and  property  upon  such  a  gigantic  scale  as  to  influence  profoundly 
the  economic  status  of  all  the  nations  of  the  earth.  The  countries  of 
the  Western  Hemisphere  have  been  seriously  affected,  and  are 
obliged  to  consider  what  measures  shall  be  taken  to  protect  their 
own  interests  from  the  consequences  of  the  mighty  European  strug- 
gle. We  of  the  United  States  have  already  tasted  the  bitter  experi- 
ence of  disrupted  credits,  paralyzed  shipping,  and  disorganized  com- 
merce. Happily  we  have  largely  overcome  them  now,  but  our  experi- 
ence enables  us  to  know  and  appreciate  to  the  full  the  difficulties 
which  you,  our  neighbors,  have  been  forced  to  meet,  perhaps  in  a 
larger  degree  than  ourselves,  from  these  same  causes.  Realizing  these 
conditions,  it  seems  both  wise  and  necessary  that  we  should  come 
together  for  the  purpose  of  considering  the  problems  that  confront 
us  and  concerting  the  means  by  which  they  may  be  successfully  met 
and  conquered. 

It  is  not  from  selfish  motive  or  sordid  desire  for  material  gain 
that  this  conference  draws  its  inspiration.  It  has  a  deeper  and  a 
finer  meaning.  We  meet  for  the  purpose  of  considering  how  and  in 
what  manner  the  great  Republics  of  the  Western  Hemisphere,  repre- 
senting as  they  do  common  ideals  of  liberty,  justice,  and  self-govern- 
ment, and  dedicated  as  they  are  to  the  highest  and  best  interests  of 
humanity,  may,  through  common  action  and  interest,  not  only  con- 
serve their  material  welfare  but  become  a  more  homogeneous  and 
powerful  moral  force  for  the  preservation  of  peace  and  the  good  of 
humanity.  [Applause.] 

A  wholesome  material  basis,  which  implies  the  prosperity  and  hap- 
piness of  the  people  of  a  nation,  is  essential  to  the  perfection  and 
realization  of  those  high  ideals  and  moral  principles  which  pro- 
foundly influence  the  course  and  progress  of  humanity.  Through  a 
better  understanding  of  the  economic  needs  of  our  respective  coun- 
tries let  us  hope  that  we  may  be  able  to  establish  a  common  basis  of 
material  prosperity  which  shall  make  increasingly  apparent  the 
essential  community  of  interest  of  the  nations  of  the  Western  Hemi- 
sphere. We  owe  it  at  least  to  ourselves  to  initiate  those  measures  and 
policies  which  will  make  the  nations  of  the  western  world  self- 
contained  and  independent  of  the  disastrous  consequences  of  future 
collisions  between  the  nations  of  the  Eastern  Hemisphere  and  capable 
of  helping  the  suffering  people  of  Europe  in  the  time  of  their  dis- 
tress and  misfortune.  So  long  as  we  are  in  large  part  financially 
dependent  upon  the  nations  of  Europe  for  our  internal  development 
and  economic  stability,  so  long  are  we  exposed  to  the  hazards  of  their 
internal  strife  and  external  wars.  This  seems  to  be  the  opportune 
time  for  the  development  of  the  spirit,  at  least,  of  continental 
solidarity. 


PROCEEDINGS.  115 

The  nations  of  the  Western  Hemisphere  can  not  make  a  greater 
contribution  to  the  cause  of  civilization  than  to  effect  that  kind  of 
continental  solidarity  which,  resting  upon  wholesome  material  inter- 
ests, political  accord,  common  ideals,  and  mutual  helpfulness,  will 
give  them  a  commanding  influence  for  the  peace  of  the  world  and  the 
service  of  mankind.  [Applause.] 

We  are  all  anxious  to  achieve  practical  results.  We  do  not  wish 
this  conference  to  culminate  in  mere  debate.  We  of  the  United 
States  earnestly  desire  that  you  shall  give  to  us  the  most  complete 
and  authentic  information  concerning  the  financial  and  economic 
needs  of  your  respective  countries  and  about  every  problem  which 
you  think  we  may  consider  to  your  and  our  advantage.  We  realize 
that  each  country  has  its  own  distinctive  problems;  that  the  prob- 
lems of  one  country  probably  do  not  relate  to  those  of  its  neighbors ; 
that  such  problems  may  concern  governmental  or  public  financing, 
tariff  laws  as  they  affect  the  United  States  trade,  commercial  credits 
and  direct  exchange  with  the  United  States,  ocean  transportation, 
and  various  other  things.  Manifestly  the  specific  problems  of  each 
country  can  not  be  debated  with  advantage  or  benefit  in  the  general 
sessions  of  the  conference.  In  order,  therefore,  to  give  each  country 
the  opportunity  of  discussing  its  particular  problems  with  the  utmost 
frankness  and  freedom  we  have  adopted  the  plan  of  dividing  the 
delegates  of  the  United  States  into  eighteen  committees.  One  of  these 
committees  will  be  assigned  to  each  of  the  countries  represented  in 
the  conference.  This  will  bring  about  a  series  of  group  conferences, 
where  the  problems  of  each  country  may  be  discussed  with  a  body 
of  representative  bankers  and  business  men  of  the  United  States, 
who  will  do  their  utmost  to  cooperate  in  the  most  effective  possible 
manner  with  the  delegates  of  the  several  foreign  countries  in  arriving 
at  tangible  and  practical  results.  The  men  who  represent  the  United 
States  have  been  chosen  because  they  are  among  our  strongest  bank- 
ers and  financiers  and  among  the  greatest  of  our  manufacturers  and 
merchants.  They  will  cooperate  with  you  in  the  most  enthusiastic 
and  sympathetic  spirit. 

As  a  result  of  these  group  conferences  it  is  hoped  that  before  the 
close  of  the  general  conference  the  delegates  from  each  foreign 
country  will  submit  a  written  report  of  such  of  the  proceedings  of 
the  group  conferences  as  they  may  desire  to  have  incorporated 
in  the  proceedings  of  the  general  conference.  These  proceedings 
will  be  published  in  English  and  Spanish,  and  will  be  given  general 
distribution.  If  the  foreign  delegates  should  be  unable  to  submit 
such  reports  before  the  close  of  the  general  sessions,  the  publication 
of  the  proceedings  of  the  conference  will  be  delayed  for  a  reasonable 
period  in  order  that  ample  time  may  be  allowed  the  foreign  delegates 
to  forward  such  reports  as  they  may  care  to  submit.  Among  the 


116  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

subjects  which  I  would  respectfully  suggest  that  the  group  con- 
ferences consider  are  the  following: 

1.  PUBLIC  FINANCE. 

(a)  Public  revenues  and  expenditures  as  affected  by  recent  events 

in  Europe. 

(b)  Measures  adopted  to  meet  the  situation. 

(c)  Proposed  remedies. 

(d)  Possibilities  of  international  cooperation. 

2.  THE  MONETARY  SITUATION. 

(a)  Conditions  prior  to  the  outbreak  of  the  European  war. 

(b)  Effects  of  the  war. 

(c)  Possibilities  of  international  cooperation. 

(d)  Outlook  for  uniform  monetary  standards. 

3.  THE  PRESENT  BANKING  SITUATION. 

(a)  Conditions  existing  prior  and  subsequent  to  the  outbreak  of 

the  European  war. 

(b)  The  establishment  of  branch  banks  and  of  direct  exchange. 

(c)  Possibilities  of  further  international  cooperation. 

4.  THE  FINANCING  or  PUBLIC  IMPROVEMENTS. 

(a)  The  underwriting  of  national  loans. 

(b)  The  underwriting  of  provincial  or  State  loans. 

(c)  The  underwriting  of  municipal  loans. 

(d)  The  relation  of  public  credit  to  a  well-organized  system  of 

taxation  and  a  balanced  budget. 

5.  THE  FINANCING  or  PRIVATE  ENTERPRISES. 

(a)  The  present  needs  of  public  service  companies,  such  as  rail- 

road, street  railway,  electric  light,  gas,  and  power  com- 
panies. 

(b)  The  needs  of  merchants  and  manufacturers. 

(c)  The  financing  of  seasonable  crops. 

(d)  The  consideration  of  plans  to  secure  a  more  satisfactory 

status  for  collateral  as  security  for  commodity  loans. 

(e)  The  possibility  of  securing  greater  uniformity  in  the  laws 

relating  to  trade  and  commerce,  in  customs  regulations, 
and  the  more  effective  protection  of  trade-marks. 

6.  THE  EXTENSION  OF  INTER- AMERICAN  MARKETS. 

(a)  Long-term  credits  as  a  means  of  stimulating  inter- Ameri- 

can trade. 

(b)  Acceptances  and  discounts  (including  warehouse  receipts) 

as  a  means  of  extending  inter- American  trade. 

(c)  The  establishment  of  direct  exchange  (often  referred  to  as 

"  dollar  exchange  ")   as  a  means  of  extending  American 
trade. 


PKOCEEDINGS.  117 

6.  THE  EXTENSION  or  INTER- AMERICAN  MARKETS — Continued. 

(d)  The  adaptation  of  the  manufactured  products  of  the  United 

States  to  the  needs  of  the  nations  of  Central  and  South 
America. 

(e)  Tariff  laws  as  they  affect  trade  with  the  United  States. 

7.  MERCHANT  MARINE  AND  IMPROVED  TRANSPORTATION  FACILITIES. 

(a)  Increased  and  improved  ocean  transportation  facilities. 

(1)  The  present  needs  in  this  respect. 

(2)  Statement  of  shipping  facilities  now  enjoyed. 

(3)  Suggestions  as  to  the  best  means  of  securing  im- 

proved transportation  service. 

(4)  What  public  or  private  encouragement  for  improved 

transportation  facilities  can  be  expected  from  the 
countries  represented  at  the  Conference. 

(5)  Improved  postal  facilities   (including  money  orders)   and 
parcel  post. 

It  must  not  be  understood  that  the  group  conferences  are  to  con- 
fine themselves  to  the  questions  I  have  suggested.  They  may  dis- 
cuss any  other  subjects  or  matters  that  they  or  the  delegates  of  the 
United  States  may  care  to  introduce. 

There  will  be  several  general  sessions  of  the  conference,  at  which 
subjects  of  common  interest  will  be  considered.    These  subjects  may 
be  covered  under  three  heads : 
Finance, 
Commerce,  and 
Transportation. 

Finance  and  commerce,  or  trade,  march  hand  in  hand.  They  in 
turn  depend  upon  adequate  means  of  transportation  and  communica- 
tion. It  is  hoped  that  in  the  general  sessions  the  delegates  from  the 
foreign  countries  as  well  as  the  bankers  and  business  men  of  the 
United  States  will  discuss  these  subjects  or  any  related  subjects  in  the 
fullest  and  frankest  manner. 

The  questions  of  ocean  transportation  and  improved  means  of  com- 
munication are  particularly  interesting  at  this  time,  and  a  full 
expression  of  opinion  upon  these  important  phases  of  the  general 
problem  will  be  of  value.  Remedies  can  not  be  applied  nor  the 
fullest  measure  of  cooperation  secured  unless  complete  and  authentic 
information  is  supplied. 

The  Postmaster  General  of  the  United  States  has  kindly  consented 
to  discuss  the  subject  of  improved  postal  facilities  to  South  America, 
and  the  Secretary  of  Commerce  of  the  United  States  has  been  good 
enough  to  agree  to  discuss  some  of  the  important  questions  of  com- 
merce. I  am  glad  to  leave  these  questions  to  the  superior  abilities 
of  my  distinguished  colleagues,  and  hope  that  their  remarks  may 
encourage  the  members  of  the  Conference  to  engage  in  a  general  dis- 
cussion of  these  interesting  subjects. 


118  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

The  question  of  the  establishment  of  branch  banks  of  the  United 
States  in  the  various  South  and  Central  American  countries  and 
the  establishment  by  those  countries  of  branch  banks  in  the  United 
States  deserves  your  earnest  attention.  Commercial  credits  and 
direct  exchange  and  the  facilitation  of  commercial  transactions 
depend  upon  the  right  sort  of  financial  organization.  Under  our 
Federal  reserve  act  the  national  banks  of  the  United  States  have 
consolidated  and  organized  their  credit  resources  in  such  a  way 
that  they  are,  for  the  first  time  in  the  history  of  this  country,  pre- 
pared to  do  a  large  amount  of  foreign  business.  They  are  also,  for 
the  first  time  in  our  history,  authorized  by  law  to  establish  branches 
in  foreign  countries.  Already  some  of  our  banking  institutions 
have  established  branches  in  South  and  Central  America.  Under 
our  Federal  reserve  act  the  Federal  reserve  banks  themselves  may, 
with  the  approval  of  the  Federal  Reserve  Board,  establish  agencies 
in  foreign  countries.  The  potentialities  of  the  Federal  Reserve  Act 
are  not  yet  fully  appreciated,  I  think,  by  our  own  people,  but  as 
time  goes  on  its  beneficial  effects  will  be  more  and  more  felt  and 
more  and  more  realized.  "We  have  now  the  opportunity  to  become 
a  powerful  factor  in  world  finance,  not  only  because  of  the  Federal 
reserve  act  to  which  I  have  alluded  but  because  of  the  strength  of 
our  own  economic  position. 

This  conference  meets  at  a  time  when  we  are  celebrating  the  re- 
moval of  the  greatest  physical  obstacles  to  closer  commercial  rela- 
tions between  North  and  South  America.  The  completion  of  the 
Panama  Canal  possessses  a  significance  far  deeper  than  the  economy 
of  time  in  transportation.  It  means  the  establishment  of  a  new  com- 
munity of  trade  interests  and  must  inevitably  bring  with  it  closer 
cultural  and  intellectual  relations  between  the  northern  and  southern 
sections  of  this  hemisphere.  [Applause.] 

A  combination  of  circumstances  and  forces — economic,  political, 
and  moral — is  bringing  us  each  day  to  a  fuller  realization  of  the 
part  that  we  are  called  upon  to  play  in  giving  to  the  world  an  ex- 
ample of  the  possibility  and  practicability  of  international  coop- 
eration. 

Nothing  would  so  stimulate  trade  between  the  southern  Republics 
and  the  United  States  and  make  so  certain  the  investment  of  United 
States  capital  in  those  countries  as  laws  of  substantial  uniformity 
relating  to  commerce  and  finance,  particularly  in  such  matters  as 
trade-marks  and  patents,  consular  invoices,  bills  of  lading,  regulation 
of  commercial  travelers,  admission  of  samples,  and  many  features  of 
the  custom  laws,  bills  of  exchange,  uniform  money  standard,  and 
various  other  things  which  it  is  not  necessary  to  enumerate.  I  desire 
to  appoint  a  committee,  consisting  of  one  member  selected  by  the 
delegation  of  each  country  represented  here,  to  consider  the  question 
of  uniform  laws  and  submit  a  report  before  the  close  of  the  confer- 
ence. I  would  suggest  that  this  committee  consider  a  recommenda- 


PROCEEDINGS.  119 

tion  that  a  high  commission,  consisting  of  representatives  of  each 
government,  be  created  for  this  purpose.  Such  a  commission,  acting 
under  the  authority  of  the  various  governments,  could  go  thoroughly 
and  intelligently  into  these  important  matters  and  recommend  appro- 
priate legislation. 

The  future  of  the  Western  Hemisphere  gives  promise  of  a  prac- 
tical and  altruistic  leadership  that  will  in  time  powerfully  and  bene- 
ficially influence  the  course  of  world  events.  We  have  only  to  keep 
a  clear  vision,  to  cultivate  the  spirit  of  mutual  helpfulness,  to  com- 
bine with  our  practical  materialism  a  noble  and  humane  idealism,  to 
stand  firmly  for  high  moral  principles,  and  to  maintain  unfalter- 
ingly the  sacred  rights  of  humanity.  Let  us  hope  that  this  great 
conference  may  contribute  to  that  end.  [Prolonged  applause.] 

Now,  gentlemen,  I  have  the  pleasure,  and  the  honor  as  well,  of  in- 
troducing to  you  the  Postmaster  General  of  the  United  States,  who 
will  talk  to  you  about  postal  conditions.  [Applause.] 

ADDRESS  OF  HON.  ALBERT  S.  BURLESON,  POSTMASTER  GENERAL 
OF  THE  UNITED  STATES. 

MR.  CHAIRMAN  AND  GENTLEMEN  OF  THE  PAN  AMERICAN  FINANCIAL 
CONFERENCE  : 

It  gives  me  pleasure  to  have  this  opportunity  to  assure  the  mem- 
bers of  this  Conference  that  the  Post  Office  Department  of  the 
United  States  will  use  its  utmost  endeavor,  and  avail  itself  of  every 
facility,  to  remove  obstacles  it  can  reach  which  interfere  with  the  sat- 
isfactory trade  conditions  between  the  countries  of  the  Western 
Hemisphere.  It  goes  without  saying  that  satisfactory  trade  relations 
between  two  countries  can  not  exist  unless  they  have  the  aid  of  an 
efficient  postal  service. 

Eecognizing  this  fact,  when  I  was  called  to  the  head  of  the  Post 
Office  Department  I  directed  my  attention  at  once  to  the  condition 
of  postal  affairs  existing  between  the  United  States  and  other  coun- 
tries of  North,  Central,  and  South  America.  The  letter  postage  rate 
existing  at  this  time  between  the  United  States  and  Central  and 
South  America  was  fixed  by  the  Universal  Postal  Congress,  which 
convened  in  Eome  in  1906.  It  became  operative  in  1907,  and  it  fixed 
the  postal  rate  for  letters  at  5  cents  for  the  first  ounce  or  fraction 
thereof  and  3  cents  for  each  additional  ounce  or  fraction  thereof. 

But  by  special  conventions  the  United  States  established  a  2-cent 
rate  between  the  United  States  and  the  other  countries  of  North 
America.  These  countries  found  it  mutually  advantageous.  I  do  not 
say  that  it  was  the  cause  of  satisfactory  trade  relations  growing  up 
between  them,  but  much  more  satisfactory  conditions  exist  between 


120  PAN  AMERICAN   FINANCIAL   CONFERENCE. 

the  United  States  and  the  other  countries  of  North  America  than 
between  the  United  States  and  the  countries  of  South  America. 

Believing  that  I  should  do  everything  I  could  to  improve  the 
postal  facilities  between  the  United  States  and  the  countries  of  Cen- 
tral and  South  America,  I  caused  to  be  addressed  to  each  of  those 
countries  a  proposal  that  they  should  be  given  the  advantages  of  the 
domestic  rate  of  2  cents,  just  as  it  existed  between  the  United  States 
and  Mexico  and  the  United  States  and  Canada. 

Unfortunately  the  European  war  came  on,  and  the  countries  of 
South  America  and  Central  America  found  it  inadvisable  from  their 
standpoint  to  make  any  change  in  the  postal  rate,  because,  as  they 
believed,  it  would  diminish  their  postal  revenues,  which  they  were 
unwilling  to  suffer  at  this  time. 

But,  gentlemen,  the  opportunity  will  be  given  your  countries  again 
immediately  upon  the  cessation  of  this  horrible  war  across  the 
waters,  for  then  I  purpose  again  to  press  it  upon  the  attention  of 
each  Central  American  and  South  American  country  that  they  ought 
to  avail  themselves  of  an  opportunity  to  enjoy  the  domestic  rate  of 
2  cents  on  letters  going  from  this  country,  and  whatever  the  domes- 
tic rate  is  in  their  country,  for  letters  coming  from  their  country  to 
the  United  States. 

I  confidently  believe  that  if  they  would  enter  into  this  arrange- 
ment with  the  United  States  the  increase  in  the  volume  of  business 
would  result  in  an  increase  in  the  volume  of  mail  matter,  which 
would  more  than  offset  the  postal  revenue. that  would  be  lost  by 
reducing  the  rate.  [Applause.] 

I  believe  that  one  postage  rate  should  be  common  to  every  country 
upon  the  Western  Hemisphere,  and  a  letter  written  in  Patagonia 
ought  to  go  up  to  the  farthest  point  in  British  Columbia  with  a 
stamp  of  the  same  denomination  that  is  used  between  this  country 
and  Cuba  or  between  our  country  and  Argentina,  or  any  other  coun- 
try on  this  hemisphere. 

Another  thing  I  soon  discovered,  gentlemen :  When  I  assumed  con- 
trol of  the  Post  Office  Department  we  had  in  this  country,  recently 
established,  a  parcel-post  system,  and  it  has  developed  somewhat. 
You  will  recognize  the  fact  that  there  has  been — without  any  boasting, 
now,  I  make  the  statement — a  phenomenally  rapid  development  of 
this  service.  During  the  last  fiscal  year  we  transported  in  this  coun- 
try through  this  service  more  than  a  billion  parcels. 

I  immediately  took  up  with  South  American  and  Central  Ameri- 
can countries  the  negotiations  of  conventions  for  the  transportation 
of  parcels  in  the  post.  The  United  States  now  has  a  convention  with 
every  Central  and  South  American  country  save  two ;  and  yet  there 
has  been  practically  no  development  of  the  parcel-post  traffic  between 


PKOCEEDINGS.  121 

this  country  and  Central  and  South  America.  The  last  fiscal  year  we 
sent  from  this  country  to  all  of  South  and  Central  America  and  the 
West  Indies  only  256,942  parcels,  a  smaller  number  than  is  sent  out 
in  the  forenoon  of  one  day  in  some  of  the  cities  of  the  United  States. 
And  what  is  the  cause  of  that?  Why  is  it  that  traffic  between  the 
United  States  and  Central  and  South  American  countries  can  not  be 
developed  through  the  parcel-post  system?  Under  the  operation  of 
the  service  in  the  United  States  I  have  told  you  of  the  development 
that  we  have  had  here.  Only  a  casual  investigation  will  convince  one 
that  the  failure  to  develop  the  traffic  with  our  neighbors  is  the  lack, 
first,  of  frequent  and  regular  steamship  transportation  facilities; 
second,  proper  banking  facilities ;  and  third,  conventions  between  the 
United  States  and  Central  and  South  American  countries  for  an 
exchange  of  money  orders.  You  can  understand  this  lack  of  devel- 
opment when  you  are  told  we  have  only  one  line  of  steamers  between 
the  United  States  and  South  America  and  that  sailings  take  place  at 
infrequent  intervals. 

You  can  understand  that  we  can  not  develop  a  parcel-post  service 
without  the  assistance  of  an  efficient  money-order  service.  And 
do  you  know  that  at  this  time  there  is  a  money-order  convention  of 
the  United  States  with  only  three  Central  American  countries  and 
with  only  four  of  the  great  countries  of  South  America  ?  I  have  said 
great  countries  of  South  America.  I  am  not  going  to  name  them, 
but  these  conventions  are  not  with  the  great  countries  of  South  Amer- 
ica but  with  four  of  the  smaller  ones.  Now,  gentlemen,  there  is  a 
reason  for  this.  These  countries  have  been  given  the  opportunity, 
time  and  time  again,  to  enter  these  conventions,  and  the  matter  has 
been  taken  up  by  the  authorities  of  the  United  States  with  each 
of  the  directors  or  controllers  of  postal  affairs  of  various  countries 
of  South  and  Central  America,  and  the  advantages  of  this  service 
have  been  pointed  out  to  them.  Two  of  the  countries  of  South 
America  do  not  even  have  a  domestic  system  of  money  orders,  but 
all  of  them,  save  these  two,  have  a  very  efficient  domestic  system  of 
money  orders,  and  yet,  as  I  tell  you,  we  have  a  money-order  exchange 
convention  with  only  seven  countries  of  Latin  America.  One  of  the 
reasons  why  we  do  not  have  it  is  the  varying  standards  by  which 
values  are  measured  as  well  as  their  wide  and  frequent  fluctuations. 
Before  we  can  have  satisfactory  money-order  conventions  -between 
the  United  States  and  all  the  countries  of  Central  and  South  America 
there  must  be  established  in  this  country,  in  my  judgment,  a  banking 
facility  that  will  enable  us  to  have  exchange  in  dollars  and  not  in 
pounds  sterling.  [Applause.] 

Gentlemen,  I  have  given  in  brief  the  outline  of  the  condition  of 
postal  affairs  as  between  our  country,  my  country,  and  the  various 


122  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

countries  of  Central  and  South  America.  If  fairly  satisfactory  trade 
relations  are  to  be  established  between  these  various  countries,  we 
must  have  efficient  postal  service  between  each  and  all  of  them. 

In  my  opinion,  the  first  thing  that  must  be  done  is  the  establish- 
ment of  proper,  frequent,  and  regular  steamship  transportation 
facilities;  not  for  the  advantage  of  the  United  States,  for,  in  my 
opinion,  this  ought  to  be  done  in  cooperation  between  the  countries 
of  South  America  and  the  United  States  or  between  the  citizens  of 
the  countries  of  South  America  and  the  citizens  of  the  United  States. 
[Applause.]  Not  for  the  advantage  of  one  over  the  other,  but  for 
the  benefit  of  all.  Then  good  banking  facilities  and  postal  relations, 
and  we  are  in  sight  of  the  goal. 

So  far  as  I  am  concerned,  gentlemen,  I  have  now  covered  the  sub- 
ject matter  which  the  Secretary  of  the  Treasury  gave  me  to  discuss. 
Again  I  want  to  assure  you  of  every  endeavor  of  mine  as  Postmaster 
General  to  improve  the  postal  facilities  between  the  United  States 
and  all  the  countries  of  South  and  Central  America.  [Applause.] 

This  is  a  most  important  conference.  If  you  gentlemen  do  your 
work  well,  in  my  opinion  the  result  will  not  only  prove  of  lasting 
benefit  to  our  countries  but  it  will  the  more  firmly  cement  the  sincere 
friendship  which  at  this  time  happily  exists  between  all  of  the  coun- 
tries of  North,  Central,  and  South  America.  [Prolonged  applause.] 

Secretary  McADOO.  I  now  have  the  honor  of  introducing  the  dis- 
tinguished Secretary  of  Commerce  of  the  United  States.  He  has 
made  a  very  thorough  study  of  South  American  problems  and  he 
knows  all  aboufc  commerce.  I  feel  sure  that  you  will  be  delighted  to 
hear  from  him. 

ADDRESS  OF  HOff.  WILLIAM  C.  REDFIELD,  SECRETARY  OF 

COMMERCE. 

Mr.  CHAIRMAN  AND  GENTLEMEN  : 

It  seems  to  me  that  it  is  rather  a  grave  duty  to  speak  to  you  to-day, 
for  what  is  said  now  is  said  at  such  a  time  as  man  never  knew  before, 
at  least  since  the  industrial  and  financial  system  which  we  use  was 
founded.  Almost  all  the  world  is  on  fire  except  ourselves,  and  we, 
both  of  the  North  and  the  South,  have  felt  some  of  the  reflected  heat. 
The  sources  of  credits,  yours  and,  to  some  extent,  ours,  were  suddenly 
shaken  or  broken.  The  currents  of  trade  with  which  we  were 
trained  to  be  familiar  and  on  which  we  have  hitherto  depended 
were  suddenly  stopped  and- there  has  been  in  every  land  here  repre- 
sented more  or  less  distress.  Gentlemen,  we  are  gathered  here  rep- 
resenting two  great  continents  with  many  common  ideals,  but  too 
little  in  touch  with  one  another  in  the  past.  It  is  not  an  official  part 


PKOCEEDINGS.  123 

of  our  program,  but  it  is  a  real  fact  behind  our  program,  that  the 
shock  of  war  has  thrown  the  Americas  together.  They  must  see 
what  they  can  do  for  themselves  at  a  time  when  contact  with  a 
large  part  of  the  world  has  been  rudely  interrupted,  and  we  are  here 
to  determine  what  it  is  possible  to  do  to  help  one  another,  for  we 
know,  as  truly  as  men  can  know  the  future,  that  the  thing  which 
has  occurred  between  Europe  and  ourselves  can  not  occur  between 
the  Americas.  The  conditions  do  not  exist  that  can  make  it  think- 
able that  there  should  be  between  the  North  and  the  South  and  the 
East  and  the  West  of  America  such  a  situation  as  unhappily  has 
broken  the  intercourse  with  our  brethren  on  the  other  side  of  the 
Atlantic.  [Applause.] 

I  should  do  in  justice  to  you  and  to  myself  if  I  did  not  express,  first, 
a  pleasure  and,  second,  a  hope.  The  pleasure  is  that  which  is  common 
to  myself  and  my  colleagues  in  the  Government  of  the  United  States 
in  having  you  here  where  we  can  meet  one  another  face  to  face  and 
hand  to  hand,  where  we  can  talk  together  of  needs  and  opportunities 
and  come  by  personal  contact  into  that  thorough  understanding 
which  it  is  difficult  to  reach  in  any  other  way.  The  hope  that  is  in 
my  mind  is  that  this  conference  shall  not  be  one  merely  of  pleasant 
fellowship  and  even  of  delightful  association  leading  to  happy 
memories  but  that  it  shall  be  the  beginning  of  tangible  things  upon 
which  there  shall  be  built  a  structure  of  mutual  self-help  that  shall 
long  endure  to  our  common  good.  Out  of  the  words  that  shall  here 
be  spoken  let  us  both  intend  and  strive  that  deeds  shall  come,  acts 
which  shall  be  effective  and  lasting,  tracing  their  genesis  to  this  hon- 
orable source. 

With  this  background,  therefore,  of  pleasure  and  hope  so  inade- 
quately and  briefly  expressed  let  me  discuss  with  you  matters  of 
mutual  concern. 

First  of  all,  therefore,  we  will  speak  frankly  of  certain  miscon- 
ceptions, and  will  begin  with  one  of  our  own.  Too  much  in  this 
country  is  it  the  habit  for  business  concerns  to  insist  when  making 
sales  upon  cash  with  documents.  This  means,  of  course,  where  goods 
must  travel  far  that  the  seller  is  in  possession  of  his  money  long 
before  the  buyer  has  opportunity  even  to  receive  the  goods,  much  less 
to  sell  them  and  get  paid  for  them.  It  is  obvious  that  this  process 
carried  to  an  extreme  would  require  an  abnormal  proportion  of  free 
money  on  the  part  of  the  buyer  and  a  considerable  loss  of  interest 
and  use  of  same  because  it  would  be  tied  up  while  the  goods  which 
it  represented  were  still  in  transit.  There  are,  to  be  sure,  business 
houses  that  prefer  to  buy  their  goods  this  way  because  it  permits 
them  not  only  to  take  advantage  of  cash  discounts  but  to  give 
them  that  power  in  buying  which  is  always  his  who  has  the  money 
ready  with  which  immediately  to  pay.  The  method,  however,  is 


124  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

one  which  is  not  possible  to  many  a  solvent  merchant,  and  this  being 
so  it  is  restrictive  of  the  operations  both  of  the  seller  and  of  the 
buyer.  In  so  far  as  it  arises  from  ignorance,  as  it  often  does,  it  indi- 
cates to  some  degree  the  extent  to  which  such  ignorance  acts  as  a 
handicap  to  the  seller.  In  so  far  as  it  arises  from  distrust  of  respon- 
sible houses,  it  is  almost  an  impropriety  provided  such  distrust  could 
be  removed  by  available  means  of  information ;  and  if  there  were  no 
reason  for  the  distrust,  then  is  the  seller  doubly  hurt,  both  because 
he  has  made  a  business  mistake  in  feeling  the  distrust  and  because 
he  is  hampered  by  the  ignorance  out  of  which  it  arises. 

There  are,  as  every  business  man  knows  or  may  know,  houses  in 
every  important  city  in  the  world  a  debt  from  whom  is  a  good  asset, 
and  with  reasonable  care  our  business  concerns  should  be,  and  many 
are,  willing  to  sell  abroad  on  open  account,  as  they  do  at  home.  The 
extending  of  long  credits,  concerning  which  much  is  said,  seems  to 
me,  however,  a  function  rather  of  the  banker  than  of  the  manu- 
facturer. The  latter  is  himself  the  victim  of  short  credits.  He  must 
"pay  immediate  cash  for  his  labor  and  often  for  his  materials.  If  he 
under  these  conditions  is  to  sell  on  very  long  credits,  he  must  be  paid 
for  so  doing  in  the  prices  that  he  must  charge.  Long  credits,  there- 
fore, do  not  permit  cheap  goods  for  the  buyer,  but  the  reverse.  The 
manufacturer  who  can  close  an  account  quickly  and  proceed  to  an- 
other transaction  can  afford,  through  the  rapid  turnover  of  his  funds, 
to  sell  at  a  margin  impossible  for  him  who  by  reason  of  long  credits 
must  do  business  on  a  more  extended  and  more  costly  basis. 

On  the  other  hand,  it  is,  of  course,  true  that  the  solvent  merchant 
who  may  not  be  able  to  afford  cash  with  documents  for  goods  which 
may  be  weeks  in  reaching  him  may  still  have  credit  amply  good  to 
warrant  advances  on  the  part  of  a  banker  to  pay  for  actual  mer- 
chandise from  which  when  sold  the  seller  will  receive  more  than 
sufficient  to  repay  the  loan.  The  more  normal  process  of  trade, 
therefore,  would  seem  to  be  not  for  the  buyer  to  call  upon  the  seller 
to  grant  long  terms,  with  the  corresponding  disadvantage  in  prices, 
but  for  the  banker  to  intervene,  and  seeking  only  normal  interest 
on  sound  loans  to  carry  the  transaction  over  from  the  seller  to  the 
buyer  in  such  wise  as  to  be  a  burden  to  neither  while  profiting  him- 
self for  his  useful  service. 

There  is,  however,  another  side  to  this  whole  matter.  Just  as  it 
is  true  that  some  houses  prefer  to  buy  cash  against  documents  so 
it  is  true  that  there  are  large  houses  among  our  industries  that  are 
willing  to  sell  on  long  terms.  At  this  point,  however,  comes  in 
another  principle,  which  is  quite  as  important  as  that  either  of 
prompt  cash  or  long  time,  and  this  is  the  principle  that  however 
payment  is  to  be  arranged  it  should  be  the  absolute  standard  of 
practice  that  it  should  be  made  just  as  it  is  arranged.  If  we  must 


PROCEEDINGS.  125 

plead  guilty  in  part  to  such  ignorance  of  credits  abroad  on  the 
part  of  some  of  our  sellers  as  induces  them  at  times  unwisely  to 
demand  cash  against  documents,  it  is  also  true  that  sometimes  our 
sellers  who  have  extended  the  longer  credits  demanded  have  not 
received  payment  at  their  maturities.  What  is  essential  seems  to 
me  to  be  the  carrying  out  of  the  transaction  with  equal  accuracy 
in  all  its  forms.  If  the  buyer  desires  goods  shipped  by  a  certain 
steamer  on  a  certain  day  he  should  himself  be  prepared  to  make  his 
payment  with  similar  certainty.  If  this  one  thing  were  done  a 
serious  difficulty  would  immediately  disappear  from  our  mutual 
transactions.  It  is  so  evidently  sound  that  I  venture  to  hope  the 
influence  of  those  here  assembled  may  be  exerted  strongly  and  con- 
tinuously in  its  favor. 

Having  spoken  thus  frankly  on  one  phase,  let  us  now  proceed  with 
equal  plainness  to  another.  It  is  perfectly  well  known  to  our  friends 
in  Latin  America  that  we  of  the  north  lack  the  more  gracious  and 
formal  manners  so  pleasantly  visible  throughout  our  sister  nations 
to  the  south.  We  have  not  the  same  courteous  style  in  correspond- 
ence. We  lack  the  recognition  of  the  politenesses  which  so  pleasantly 
illuminate  the  path  of  our  Latin- American  brethren.  We  are  thought 
abrupt  if  not  rude  in  manner  and  in  speech,  especially  in  written 
speech,  and  if  this  be  taken  relatively  it  has  in  it  a  certain  measure 
of  truth.  Our  business  proverbs  do  not  tend  to  cultivate  the  charm 
of  business  intercourse.  We  speak  of  "  getting  to  the  point,"  or  we 
say  the  "  gist  of  it  is  so-and-so,"  as  if  the  commercial  result  were 
the  sole  thing  involved  in  business  intercourse.  In  this  we  may 
grant  you  we  are  losers,  for  in  believing  there  is  no  sentiment  in  busi- 
ness we  lose  sight  of  the  fact  that  there  is,  after  all,  a  great  deal  of 
sentiment  in  commerce,  which  is,  indeed,  more  influenced  by  senti- 
ment than  many  of  us  like  to  think.  We  lose  the  charm  of  the  per- 
sonal and  friendly  touch  and  become  too  nearly  automatic  in  our 
commercial  affairs,  turning  our  salesmen  too  nearly  into  selling  ma- 
chines and  depriving  them  in  their  business  work  of  the  finer  sides 
of  life.  All  this  is  true.  It  has  arisen  in  part  out  of  the  circum- 
stances of  our  history  and  out  of  the  differences  of  background.  It 
does  not  mean,  however,  all  that  it  seems  to  mean,  for  behind  the 
abrupt  word  and  the  curt  speech  lie  often  the  hand  and  heart  of  a 
willing  friend.  A  man  who  signs  himself  "  yours  truly  "  may  be  as 
genuinely  a  friend  as  he  of  the  more  formal  address ;  and  if  we,  upon 
our  part,  have  to  learn  something  of  the  more  stately  courtesy  of 
speech,  possibly  there  may  need  to  be  learned  something  also,  on 
the  other  hand,  of  how  much  genuine  character  and  good  will  may  be 
crowded  into  brief  words. 

There  is,  I  venture  to  think,  sometimes  a  tendency  in  other  lands 
to  regard  us  as  ill-bred  because  of  this  assumed  brevity  of  speech  or 


126  PAN  AMERICAN   FINANCIAL   CONFERENCE. 

because  of  certain  characteristics  of  language  or  of  manner  that 
seem,  to  say  the  least,  peculiar  to  people  accustomed  to  statelier  ways 
of  intercourse.  I  have  no  doubt  that  this  conception  has  wrought  a 
double  harm.  It  has,  upon  the  one  hand,  led  to  a  misunderstanding 
of  the  genuine  spirit  behind  the  brusque  words  and  actions  and,  upon 
the  other  hand,  to  a  misapprehension  on  our  part  of  the  value  of  the 
courtesies  which  make  life  both  tolerable  and  comfortable.  For  my 
part,  I  am  willing  to  agree  that  we  have  much  to  learn  in  the  ameni- 
ties of  commerce.  I  only  plead  for  my  countrymen  concerning  this, 
that  they  are  kindlier,  more  genuine,  more  sincere,  and  altogether 
more  worthy  than  they  may  seem  to  be  when  projected  against  a 
background  to  which  they  have  had  no  opportunity  to  become  ac- 
customed. [Applause.] 

May  we  think  together  now  of  certain  matters  that  should  be  (to 
use  our  current  phrase)  "ironed  out"  before  we  shall  reach  that 
readiness  of  intercourse  so  greatly  to  be  desired  between  us?  Busi- 
ness to  move  freely  should  be  as  nearly  automatic  as  possible.  Its 
processes  should  be  simple,  direct,  inexpensive.  Anything  which  puts 
an  obstacle  in  the  way  of  the  easy  interchange  of  commerce  affects 
that  commerce  only  hurtfully.  The  currents  of  trade  should  flow 
for  mutual  good  along  the  lines  of  least  resistance.  Practically,  the 
question  of  licenses  for  commercial  travelers  is  sometimes  a  serious 
one.  We  used  to  have  them  here  in  various  forms  between  our  sev- 
eral States,  and  in  one  or  another  way  efforts  have  from  time  to  time 
been  made  to  tax  in  one  State  travelers  coming  from  another.  This 
has  all  passed  away  under  the  overshadowing  protection  of  our 
Federal  Constitution,  under  which  commerce  is  absolutely  free  and 
unrestricted  between  the  sovereign  States  which  form  this  Republic. 
I  feel  that  between  nations  a  tax  in  the  form  of  licenses  for  com- 
mercial travelers  is  simply  another  way  of  restraining  commerce 
from  proceeding;  that  it  is  simpler,  cheaper,  and  in  the  final  result 
far  wiser  to  avoid  such  forms  of  expense  imposed  on  trade  in  order 
that  from  the  larger  trade  which  grows  normally  when  it  moves 
freely  greater  revenues  may  in  more  normal  ways  be  secured. 

We  do  not  suggest,  nor  have  we  in  the  back  of  our  thought,  that 
any  privilege  should  be  extended  us  not  granted  on  equal  terms  to 
others.  We  want  no  special  favors  in  the  peaceful  contests  of  com- 
merce. We  think  it  would  be  better  for  all  concerned  if  there  were 
as  little  as  possible  in  the  way  of  obstacles  put  in  the  way  of  the  trade 
of  all  peoples.  The  least  necessary  friction  on  the  flow  of  commerce 
seems  to  us  the  wisest  course. 

There  is  one  thing  incidental  to  what  I  have  to  say  greatly  needed 
in  South  and  Central  America  concerning  us  of  the  north,  and  that 
i  Bsome  systematic  and  reasonably  accurate  news  service  which  shall 
not  publish  throughout  all  our  sister  nations  the  small  and  the  narrow 


PROCEEDINGS.  127 

and  the  poor  and  the  bad  exclusively.  I  have  discussed  this  impor- 
tant question  with  the  managers  of  our  leading  press  associations 
and  they  deplore  it  but  find  themselves  for  the  moment  helpless  con- 
cerning it.  There  is  no  direct  cable  connection  now,  they  tell  me, 
for  press  dispatches,  for  example,  with  the  city  of  Rio  de  Janeiro, 
and  I  feel  that  we  suffer  in  the  eyes  of  our  brethren  at  the  south  for 
lack  of  a  truthful  picture  of  us  presented  every  day  in  the  columns 
of  the  daily  press  in  the  cities  of  Spanish  America. 

We  think  it  should  be  made  a  matter  of  care  that  your  great  com- 
mercial centers  should  be  connected  with  those  of  all  the  world  on  an 
equal  basis.  It  should  be  as  cheap  and  convenient  for  you  to  commu- 
nicate from  your  cities  with  ours  as  with  those  of  Europe.  At  present 
it  is  possible  for  you  to  cable  from  some  of  your  cities  to  European 
points  at  a  considerably  less  cost  than  to  our  own,  and  in  some  cases 
the  difference  is  striking.  Without  knowing  how  far  this  matter 
may  be  within  the  direct  control  of  your  several  Governments,  it 
seems  to  me  that  a  sound  policy  can  be  laid  down  'on  this  subject  in 
this  way :  It  should  be  as  easy  and  as  cheap  for  all  America  to  com- 
municate with  itself  as  it  is  for  it  to  communicate  with  lands  across 
the  sea.  There  ought  to  be  no  handicap  of  telegraphic  rates  between 
American  countries  in  favor  of  European  ones.  We  of  America  are 
in  a  sense  of  one  international  family,  and  we  should  see  to  it  that 
the  family  is  not  at  a  disadvantage  in  this  important  respect.  [Ap- 
plause.] 

The  same  thing  is  true  in  matters  of  transportation.  I  suppose  no 
nation  has  ever  paid  so  great  a  premium  on  behalf  of  its  commerce 
as  we  have  paid  in  the  cost  of  the  Panama  Canal.  If  we  are  to  get 
the  results  of  that  investment  there  must  be  ships  under  our  own 
control  to  navigate  that  canal  wherever  and  as  often  and  of  such  a 
character  as  the  needs  of  our  commerce  require.  This,  one  might 
think,  is  purely  a  matter  for  ourselves,  but  it  is  not  wholly  so.  It 
ought  to  be  the  case  that  all  of  the  peoples  here  represented  shall  be 
bound  together  by  ocean  transit  lines  as  frequent  and  as  good  as  those 
which  ply  from  any  land  to  our  common  ports. 

Upon  these  general  statements  most  men  will  agree,  save,  perhaps, 
those  whose  direct  interest  in  this  subject  may  lead  them  to  look  with 
normal  hesitancy  upon  a  larger  competition  in  their  own  field  of 
activity.  The  nations  require  better  means  of  transportation.  More 
and  better  ships  are  necessary  to  bring  your  goods  to  us  and  ours  to 
you ;  aye,  to  bring  you  here  and  take  us  yonder.  It  is  a  vital  neces- 
sity that  if  America  is  to  be  more  closely  knit  together  it  should  be 
made  as  easy  and  as  rapid  as  possible  for  us  to  go  and  for  you  to  come 
and  for  our  letters  and  our  goods  to  move  frequently  and  with  speed. 
We  are  in  this  country  in  the  humiliating  position  of  doing  our  for- 
eign trade  by  the  consent  of  those  other  peoples  who  have  the  ships 


128  PAN  AMERICAN   FINANCIAL   CONFERENCE. 

to  carry  it.  This  consent  is  of  course  given  so  long  as  it  is  profitable 
for  them  to  give  it.  The  danger  of  the  situation  lies  in  the  fact  that 
our  interests  may  not  always  be  common,  and  when  they  diverge 
they  may  if  they  will  divert  the  means  whereby  our  commerce  lives. 
So  long  as  they  need  the  things  that  we  produce  and  can  profit  by 
moving  them  for  us  they  will  of  course  do  it;  but  if  some  sterner 
necessity  arose  with  them  they  might  neither  be  able  nor  willing  so 
to  do,  and  then  we  would  suffer.  I  do  not  think  the  people  of  the 
United  States,  when  once  they  realize  that  it  has  been  by  the  protec- 
tion of  foreign  navies  only  that  we  have  been  able  to  carry  on  our 
foreign  commerce  in  recent  months,  will  be  willing  long  to  have  it 
remain  so.  The  question  is  one  for  which  we  are  earnestly  seeking 
a  solution,  and  contributions  that  can  be  made  to  sober  and  to  pro- 
gressive thought  upon  the  subject  will  be  welcome  to  us  from 
wherever  they  may  come. 

We  have  suffered  no  little  here  from  men  who  rose  to  speak  on 
this  theme  with  negatives  in  their  minds,  whose  first  expression  was 
"  Thou  shalt  not,"  and  unhappily  these  negatives  have  been  far  too 
powerful  thus  far,  so  that  the  merchant  fleet  of  the  United  States 
is  all  too  near  itself  being  a  pure  negation.  We  hope  that  a  more 
affirmative  spirit  may  arise,  in  which  the  getting  of  a  merchant 
marine  into  active  service  may  be  understood  to  be  so  vital  a  matter 
that  the  men  with  the  negatives  will  cease  to  be  so  powerful  as 
hitherto  they  have  been,  and  this  people  of  ours,  which  prides  itself 
upon  being  an  affirmative  people,  may  in  some  manner  get  that 
which  they  are  beginning  to  see  as  essential  at  once  to  their  pros- 
perity and  their  self-respect.  We  earnestly  desire  the  development 
of  a  merchant  marine  which  shall  facilitate  intercourse  between  us, 
which  shall  make  the  names  of  your  ports  and  of  your  mercantile 
houses  both  welcome  and  common  among  us. 

It  is  frankly  recognized  that  there  are  readjustments  necessary  in 
some  of  our  commercial  ideas  and  methods  if  we  of  the  United  States 
are  to  develop  our  commerce  with  South  and  Central  America  in  the 
most  helpful  and  permanent  way.  We  must  learn  not  so  much  to 
offer  the  things  we  want  to  sell  as  to  make  and  offer  those  which  the 
customer  wants  to  buy.  It  is  not  to  be  expected  that  markets  in  other 
lands  will  wish  to  use  the  goods  which  please  us  here.  The  mere 
fact  that  we  happen  to  like  an  article  of  a  certain  design  or  color 
is  no  reason  why  anyone  else  should  like  it.  It  does  not  follow  at 
all  that  because  something  sells  well  here,  therefore  it  will  sell  well 
elsewhere.  Some  of  us  must  learn  to  do  our  business  more  intelli- 
gently in  this  respect,  and  I  am  happy  to  say  that  there  is  a  growing 
and,  I  think  now,  a  fairly  general  understanding  of  this  primary 
fact. 


PROCEEDINGS.  129 

There  is  another  subject  of  which  I  have  frequently  spoken,  my 
American  friends  of  the  north.  Suppose  a  Russian  salesman  conies 
to  your  city  to  sell  you  goods,  in  New  York  or  Boston  or  St.  Louis 
or  Chicago,  and  he  presents  to  you  literature  in  Russian,  with 
Russian  weights  and  measures,  and  he  himself  speaks  only  Russian. 
How  many  goods  will  you  buy  of  the  Russian  salesman?  And 
yet  precisely  that  process  is  what  we  of  the  United  States  have 
at  our  infinite  cost  attempted  to  do  almost  all  round  the  world. 
I  speak  from  personal  knowledge.  A  business  house  in  one  of 
our  two  largest  cities  sent  a  package  of  goods  to  a  European  city 
where  I  had  an  office.  It  lay  some  days  untouched  beside  my 
office  in  the  hall.  At  last,  to  get  it  out  of  my  way,  I  opened 
the  box.  In  it  was  a  lot  of  English  literature,  in  feet  and  inches  and 
pounds  and  ounces,  and  it  was  intended  for  consumption  in  a  French 
community.  Yet  the  North  American  house  that  sent  that  box  was 
conspicuous  in  the  United  States  for  its  wealth,  its  size,  and  its  power 
in  its  business  in  this  country,  and  its  name  is  a  household  word 
among  many  of  our  business  men.  That  is  a  kind  of  primary  busi- 
ness we  must  get  well  over  before  we  shall  be  treating  our  friends  in 
the  Southland  with  proper  respect. 

Again,  we  must  learn  not  to  put  our  business  in  other  lands  in  the 
hands  of  those  citizens  of  other  countries  whose  interests  may  be  at 
least  as  great  in  the  products  of  their  own  land  as  they  are  in  those 
of  this  country,  if  indeed  they  are  not  much  greater.  The  producers 
of  the  United  States  must  not  only  offer  their  wares  in  other  coun- 
tries of  such  a  kind  as  please  the  people  in  those  countries  but  they 
must  do  it  through  media  which  take  a  primary  interest  in  the  prod- 
ucts of  the  United  States  and  not  a  secondary  or  possibly  an  adverse 
one.  [Applause.] 

May  a  word  be  said  in  strong  assertion  of  the  fact  (sometimes  in 
some  places  questioned)  that  the  merchants  and  manufacturers  of  the 
United  States  are  honorable  men,  seeking  to  do  business  by  methods 
that  are  open,  sincere,  and  morally  sound.  We  know  that  such  a 
thing  as  substitution  of  goods  for  others  which  were  ordered  has 
happened.  We  know  that  there  are  those  who  have  insisted  that 
they  know  better  what  the  buyer  wants  than  he  does  himself.  We 
know  that  instructions  have  been  ignored  and  that  matters  which 
were  not  understood  by  us  did  not  receive  the  attention  that  should 
have  been  given.  These  things  are  true,  though  not  to  the  extent,  I 
hope,  that  has  at  certain  times  been  alleged.  They  are  not  evidences 
of  indifference  or  of  purpose  to  do  wrong.  They  are,  rather,  normal 
indications  of  beginning  to  do  a  kind  of  commerce  the  nature  of 
which  was  not  fully  understood  for  lack  of  experience  in  it  and  they 
are  passing  things — indeed  have  largely  passed  away,  and  they  are 

98257°— 15 9 


130  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

also  things  against  which  our  business  public,  which  is  intent  on 
doing  its  work  in  the  right  way,  seeks  carefully  to  guard  itself  and 
on  which  it  welcomes  light. 

Let  me  emphatically  state  that  confidence  may  be  put  upon  the 
honor  of  our  business  houses  and  their  purpose  to  give  value  for  value. 
In  every  large  country  there  are  individuals  who  sin,  but  we  are  all 
too  wise  to  judge  the  country  a  wholesale  sinner  on  that  account. 

A  beginning  has  been  made  (a  welcome  beginning,  but  only  a 
beginning)  in  placing  American  banking  facilities  among  the  peoples 
of  Spanish  America.  It  is  earnestly  to  be  hoped  that  this  may  greatly 
increase  and  that  it  may  not  be  long  before  in  every  important  cen- 
ter throughout  America  there  shall  be  a  banking  institution  through 
which  the  currents  of  fiscal  affairs  may  readily  flow  through  all  the 
length  and  breadth  of  our  two  great  continents.  I  hope  the  day  will 
soon  come  when  the  securities  of  the  different  nations  here  repre- 
sented, and  of  the  subdivisions  thereof  and  the  great  enterprises 
therein,  shall  be  well  known  in  our  exchanges;  and  not  only  so,  but 
it  shall  also  soon  come  to  be  true  that  in  every  important  city  in  the 
lands  here  represented  it  shall  be  an  ordinary  and  simple  thing  to 
receive  and  to  remit  funds  drawn  upon  strong  financial  institutions  in 
either  of.  the  two  continents  whom  we  represent.  Such  an  ideal  can 
not  be  rushed  into  being,  for  haste  would  mean  waste,  but  it  is 
earnestly  to  be  desired  that  there  shall  be  steady  progress  toward  it. 
We  recognize  that  if  the  commerce  between  us  is  to  be  of  mutual 
service  we  must  do  our  share  of  the  buying  as  well  as  of  the  selling, 
and  we  welcome  every  instrumentality  which  makes  it  easier  for  us 
to  do  our  part.  [Applause.] 

Finally  we  pass  to  our  conception  of  commerce,  and  especially  to 
the  form  which  it  seems  that  commerce  must  for  the  present  take  if 
it  is  to  be  developed  to  the  full.  There  are  in  many  of  your  lands 
great  resources,  some  of  them  all  but  untouched.  They  need  the 
magic  power  of  money  to  turn  them  into  living  factors  in  your  na- 
tional life.  The  great  stream  of  credit  which  has  flowed  out  from 
European  bourses  is  interrupted  or  cut  off.  America  is  in  a  peculiar 
sense  thrown  back  upon  herself.  This  is  true  throughout  her  length 
and  breadth,  in  all  her  divisions.  Never  was  she  since  our  com- 
mercial and  industrial  and  financial  system  was  established  so 
isolated  from  the  world  upon  the  one  hand  and  so  necessary  to  the 
world  upon  the  other  as  now  she  is.  It  is,  of  course,  true  that  a 
great,  and  in  some  respects  a  growing  business,  is  being  done,  par- 
ticularly between  us  and  the  other  peoples  of  the  world  who  have 
been  deprived  by  the  war  of  the  sources  of  supply  which  have  been 
normal  to  them.  Nevertheless  it  is  financially  true,  so  far  as  we  of 
the  United  States  are  concerned,  and  it  is  commercially  true  in 
large  measures  so  far  as  our  sister  nations  of  Latin  America  are 


PROCEEDINGS.  131 

concerned,  that  we  are  independent,  or  rather  separate  in  a  sense 
that  we  have  never  known  before.  That  separation  has  not  been 
wholly  happy  in  some  of  its  results.  It  has  deprived  many  of  our 
sister  nations  of  sources  of  credit  to  which  they  were  accustomed, 
of  sources  of  supply  from  which  they  have  long  drawn,  and  nothing 
has  as  yet  arisen  to  take  their  place  sufficiently. 

It  is  here  that  the  door  opens  for  great  good,  if  we  are  but  wise 
and  courageous  enough  to  see  it.  The  peoples  of  Latin  America 
have  been  richly  endowed  by  nature.  They  have  great  abundance 
of  the  things  which  are  drawn  out  of  the  bosom  of  the  kindly  earth. 
We  of  the  United  States,  being  blessed  also  in  this  same  respect, 
have  been  fortunate  in  having  added  a  highly  developed  and  power- 
ful industrial  system  also.  The  machines  in  our  factories  may  be 
said  to  yearn  for  the  supplies  which  come  from  the  fields  and  for- 
ests of  the  south.  Much  that  is  there  grown  is  indispensable  to  our 
needs.  Much  of  it  we  can  not  at  all  grow  ourselves. 

It  has  so  happened  that  we,  though  until  recently  a  debtor  people, 
and  perhaps  in  some  degree  still  in  that  class,  are  also  a  great  sav- 
ing people,  and  that  under  present  conditions  we  have  available 
larger  amounts  of  free  money  than  ever  before  in  our  history.  I 
have  noticed  with  much  gratification  that  some  of  this  money  has 
been  invested  either  in  securities  of  Latin  American  lands  or  in 
the  form  of  credits  for  them.  If  I  note  the  current  of  affairs  cor- 
rectly, it  seems  to  me  that  the  course  which  is  indicated  for  the 
United  States  is  to  extend  the  right  hand  of  fellowship  and  of  aid 
to  her  sister  nations  of  kindred  forms  of  government,  from  whom 
the  shock  of  war  has,  without  fault  of  their  own,  removed  the  finan- 
cial basis  on  which  they  have  hitherto  largely  depended. 

It  is  earnestly  hoped  both  for  the  sake  of  American  finance  and 
commerce  that  the  men  who  guide  our  fiscal  institutions  may  see 
their  way  to  a  broader  participation  in  the  financial  growth  of 
Spanish  America.  There  is  no  such  solid  foundation  on  which  to 
build  a  great  commercial  structure  as  that  of  mutual  self-help.  If 
we  who  have  the  means  will  say  to  our  brethren  in  the  southern 
lands,  "We  are  ready  to  help  you  to  the  extent  of  our  power;  we 
are  not  without  our  own  problems,  indeed,  but  we  will  serve  you  as 
well  as  we  are  able,"  then  having  done  our  part  we  may  with  more 
reason  ask  them  for  a  larger  share  in  the  larger  commerce  that  will 
normally  spring  out  of  our  participation. 

Fortunately  for  us  all  the  bankers  and  the  manufacturers  of  the 
United  States  count  among  them  many  men  of  vision  and  of  high 
ideals.  They  play  the  game  of  finance  and  commerce  according  to 
high  standards  and  by  fine  rules.  They  look  not  so  much  at  the 
thing  which  to-day  is  as  at  that  which  to-morrow  shall  be.  They 
are  willing  to  act  to-day  to  help  develop  the  to-morrow.  They  know 


132  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

that  more  profit  comes  to  each  when  both  sides  are  gainers.  They 
do  not  need  to  be  told  that  rich  prizes  await  him  who  develops  the 
resources  our  southern  sisters  so  abundantly  possess;  but  they  are 
too  wise  to  think  that  to  attempt  this  in  a  purely  selfish  way  would 
long  remain  either  pleasant  or  profitable. 

We  have  begun  to  get  together.  Our  men  of  light  and  leading  in 
finance  and  commerce  have  taken  the  first  step.  There  should  be 
many  more  taken.  The  Department  of  Commerce,  which  I  have  the 
privilege  of  representing  before  you,  will  do  all  it  can  now  and  here- 
after to  promote  mutual  intercourse  to  mutual  gain,  and  will  welcome 
suggestions  as  to  how  this  can  best  be  done.  It  possesses  means  of 
publicity  at  home  and  abroad.  It  will  not  hesitate  to  ask  Congress 
for  such  further  powers  as  may  be  shown  to  be  practicable  in  the  de- 
velopment of  our  mutual  trade;  and  Congress,  I  believe,  looks  with 
broad  sympathy  on  practical  efforts  to  unite  America  in  a  commer- 
cial bond  which  means  mutual  intercourse  for  mutual  good.  [Pro- 
longed applause.] 

GENERAL  ANNOUNCEMENTS. 

Secretary  McADOO.  Gentlemen,  I  wish  to  make  one  or  two  an- 
nouncements before  we  proceed  further  with  the  work  of  the  Con- 
ference. First  of  all  let  me  say  that  the  new  edition  of  the  program 
will  be  ready  to-morrow.  That  will  include  the  names  of  representa- 
tives of  the  United  States,  as  we  did  not  have  acceptances  from  all  of 
them  at  the  time  this  edition  went  to  press. 

I  also  wish  to  say  that  credentials  may  be  delivered  to  the  Secre- 
tary-General at  the  hotel,  and  that  we  shall  defer  the  roll  call  of  the 
delegates  until  to-morrow  morning,  when  everyone  will  be  here. 

In  arranging  the  program  it  has  not  seemed  wise  for  the  presiding 
officer  to  suggest  who  shall  speak  for  the  different  countries  here 
or  for  the  United  States.  We  have  purposely,  therefore,  refrained 
from  putting  on  the  list  the  names  of  speakers,  because  we  wish  you 
all  to  feel  that  you  have  the  utmost  freedom,  and  that  at  these  general 
sessions  anyone  may  rise  and  present  any  subject  upon  which  he 
desires  to  talk. 

I  notice  that  the  program  says  there  will  be  "  remarks  "  by  delegates 
and  guests.  I  think  that  the  word  "  remarks  "  has  perhaps  a  different 
signification  in  Spanish  from  that  which  it  has  in  English.  I  am 
led  to  believe  that  in  Spanish  it  has  a  restricted  sense,  and  that  some- 
body may  draw  the  inference  that  if  a  delegate  wants  to  make  an 
address  or  longer  speech  than  mere  remarks  he  may  be  precluded 
from  doing  so.  I  wish  to  assure  you  that  the  word  is  not  used  in  that 
sense  at  all.  Any  delegate  may  speak  just  as  long  as  he  desires  and 
upon  any  subject  that  he  pleases.  We  have  been  asked  if  certain 


PROCEEDINGS.  133 

delegates  might  speak  at  certain  times.  Some  requests  of  that  kind 
have  been  made  for  the  session  to-morrow  morning.  I  may  say  that 
if  any  of  you  should  desire  to  speak  to-morrow  morning,  or  at  some 
other  session,  and  will  hand  your  name  to  the  Secretary-General 
he  will  be  glad  to  see  that  you  are  allowed  to  speak  at  such  time  as 
can  be  arranged.  I  am  alluding  particularly  to  the  foreign  guests. 
I  may  say  the  same  thing  about  representatives  of  the  United  States 
who  are  here,  that  if  any  of  them  should  care  to  be  put  down  for  any 
particular  time  on  the  program  and  any  day  of  the  program,  and 
will  send  their  names  to  the  Secretary-General,  he  will  arrange 
it  accordingly.  I  hope,  however,  that  the  conference  will  resolve 
itself  into  an  informal  discussion  without  any  arrangements — I  mean 
any  prearranged  plan  for  general  discussions.  I  think  we  will  prob- 
ably get  better  results  that  way. 

GENERAL  REMARKS  BY  DELEGATES. 

Now,  gentlemen,  I  am  going  to  suggest  to  you  that  our  foreign 
guests  be  permitted  to  open  the  discussion  to-day,  and  we  will  pro- 
ceed in  that  direction  as  long  as  time  will  permit,  and  we  will  resume 
again  to-morrow  morning  with  the  general  discussion  and  have  as 
thorough  a  talk  as  we  can  until  the  group  committees  meet  to-morrow 
afternoon.  After  the  discussion  has  proceeded  as  far  as  possible 
to-day  I  shall  announce  the  group  committees.  I  think  perhaps  it 
would  be  well  to  call  on  the  representatives  of  the  foreign  countries 
in  alphabetical  order,  as  we  did  this  morning,  so  that  they  may 
respond  if  they  desire. 

(The  Secretary-General,  Dr.  Rowe,  proceeded  to  call  the  roll.) 

ARGENTINA. 

Dr.  SAMUEL  HALE  PEARSON.  I  am  only  going  to  say  a  few  words, 
if  you  will  excuse  me.  I  simply  desire  to  state  that  I,  as  one  of  the 
delegates  of  the  Argentine  Republic,  have  made  a  brief  study  of  the 
finances  of  our  country  since  its  independence,  beginning  with  the 
first  loan  that  wras  made  in  the  year  1825  by  the  firm  of  Brown  Bros. 
&  Co.,  of  London,  continuing  the  big  financial  operations  which 
had  been  done  with  Messers.  J.  P.  Morgan  &  Co.  and  Morton  Bros. 
&  Co.,  of  New  York,  and  up  to  the  most  recent  ones  with  the  National 
City  Bank  and  various  others  of  European  connection.  I  have  also 
made  a  few  observations  with  regard  to  a  number  of  banks.  From 
the  beginning,  the  first  foreign  bank,  still  in  existence,  was  the  Lon- 
don and  River  Plate  Bank  that  started  in  the  early  sixties  and  holds 
to-day  in  Argentina  a  very  prominent  place  and  probably  the  first 
rank  as  a  banking  institution  in  the  whole  of  South  America.  It  has 
a  capital  bigger  than  that  of  any  North  American  bank.  I  have  ex- 


134  PAN  AMERICAN  FINANCIAL  CONFEEENCE. 

plained  in  a  few  words  what  was  done  in  regard  to  our  State  loans 
before  the  crisis  and  the  way  the  Government  took  up  the  old  State 
loans,  in  order  to  rearrange  its  credit  with  guarantees. 

I  do  not  want  to  read  this  now,  because  it  is  rather  long.  If  you 
will  permit  me,  I  will  pass  it  to  the  Secretary-General  and  have  it 
printed  and  circulated,  as  I  think  it  may  be  interesting  to  a  great 
many  of  the  gentlemen  here  to  know  exactly  how  the  finances  of  my 
country  are  to-day  and  what  they  were  one  hundred  years  ago. 

Secretary  McADOO.  If  you  will  deliver  it  to  the  Secretary-General, 
he  will  have  it  printed  in  time  for  distribution  to  the  Conference, 
and  it  will  also  be  printed  in  the  final  publication  of  the  Conference. 

Dr.  RICARDO  C.  ALDAO.  Mr.  Secretary,  I  wish  to  say  that  arrange- 
ments have  been  made  by  my  colleague,  Dr.  Pearson,  by  which  I  shall 
devote  my  attention  especially  to  trade  and  the  legal  side  that  may 
be  of  interest  to  my  country.  I  have  been  occupied  with  that,  and 
will  present  it  to  our  committee  when  it  meets,  in  order  that  it  may 
be  submitted  to  the  Conference  in  general  meeting. 

BOLIVIA. 

Dr.  IGNACIO  CALDERON.  We  have  had  the  pleasure  of  presenting  a 
memorandum  of  our  finances.  I  am  not  going  to  make  any  special 
remarks  now,  but  I  may  say  that  we  have  also  printed  a  whole  re- 
port of  conditions  in  my  country,  its  resources,  and  everything  out- 
lined in  the  topics  suggested  in  the  preliminary  program.  Therefore 
I  would  rather  wait  until  we  discuss  in  private  committee  what  sug- 
gestions can  be  made  in  order  to  be  in  a  position  to  present  the  matter 
later  to  the  general  session. 

Secretary  McADOO.  Let  me  explain  that  it  is  not  necessary  for  the 
delegates  to  make  any  presentations  at  this  time  unless  they  care  to. 
We  simply  wish  to  extend  to  them  the  opportunity. 

BRAZIL. 

Dr.  AMARO  CAVALCANTI.  I  have  no  particular  observations  to  make 
at  the  moment.  I  have  some  suggestions  that  I  will  lay  before  our 
committee  at  the  proper  time. 

Secretary  McADOO.  Allow  me  to  remark  to  the  gentlemen  from 
Central  and  South  America,  that  if  you  will  write  upon  a  piece  of 
paper  the  name  of  anyone  that  you  wish  to  represent  you  on  the  Com- 
mittee on  Uniformity  of  Laws  and  give  that  name  to  the  Secretary- 
General  while  we  are  proceeding,  it  will  save  time.  That  may  be 
done  while  the  discussion  is  going  on.  Just  agree  upon  your  repre- 
sentatives and  let  us  have  the  names. 


PROCEEDINGS.  135 

COLOMBIA. 

Dr.  SANTIAGO  PEREZ  TRIANA.  Mr.  Chairman,  we  have  prepared  a 
statement  as  to  the  financial  burden  of  Colombia,  from  which  can 
be  gathered  also  what  we  may  need  in  the  future.  I  am  ashamed  to 
say  that  we  have  a  very  small  debt.  We  should  have  borrowed 
more  in  the  past  than  we  have.  We  only  owe  20,000,000  pounds 
sterling  as  against  a  population  of  5£  million  people,  and  we  have 
facilities  for  employing  ten  or  fifty  times  that  amount,  and  we  hope 
we  will  be  helped  here,  for  the  benefit  of  those  who  help  us  and  for 
the  benefit  of  ourselves.  We  began  borrowing  a  little  before  the 
establishment  of  the  Argentine  Kepublic,  when  we  were  the  Prov- 
ince of  New  Granada.  They  started  in  1825.  We  started  in  1821. 
Our  first  borrowings  were  from  England,  made  in  conjunction  with 
the  other  two  Republics — Venezuela  and  Ecuador — which  at  the 
time  constituted  New  Grenada.  Our  credit  is  good,  our  facilities 
for  employing  capital  are  immense,  and  we  shall  try  to  expand  all 
that  in  due  course  from  resources  that  we  have  already,  and  also 
from  additional  ones. 

COSTA  RICA. 

There  were  no  suggestions  to  be  made. 

CUBA. 

Dr.  PABLO  DESVERNINE  Y  GALDOS.  Mr.  Secretary,  we  are  prepar- 
ing a  statement  to  be  filed  at  the  proper  time,  which  will  include  the 
topics  treated  in  the  preliminary  program.  I  have  taken  some  notes 
of  what  the  honorable  Postmaster  General  has  just  said  when  he 
referred,  for  instance,  to  the  parcels-post  arrangements  which  we 
have  not  as  yet  in  Cuba.  We  do  have,  however,  something  pertain- 
ing to  that,  such  as  the  money-order  system  and  the  standard  unit 
of  values,  as  well  as  good  transportation  facilities;  and  in  spite  of 
all  this  we  lack  parcels-post  service  with  the  United  States.  The 
reason  for  that  has  been  the  obstacles  we  have  met  in  sending  out 
some  of  our  important  products.  For  instance,  in  Cuba,  if  we  had 
a  parcels-post  system  it  would  mean  that  we  could  ship  tobacco, 
cigars,  and  cigarettes;  and,  if  my  recollection  is  correct — of  course, 
I  may  be  mistaken  in  my  figures — a  minimum  of  only  3,000  cigars 
may  be  sent  by  mail  to  the  United  States.  Therefore,  if  we  did  have 
the  parcel-post  service,  we  would  not  be  in  a  position  to  send  cigars 
here  unless  we  sent  the  minimum  of  3,000,  which  is  not  a  convenient 
amount  to  be  sent  by  mail.  I  am,  however,  negotiating  with  the 
American  minister  to  Cuba,  to  sign  an  arrangement  for  a  parcel 
post,  and  I  think  we  will  succeed ;  and  that  Cuba  will  have  the  system 
which  you  now  have,  the  standard  unit  of  value  and  good  transporta- 
tion facilities  of  the  United  States. 


136  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

All  of  that,  of  course,  will  be  taken  up  by  us  and  explained  in  an 
intelligible  way.  Owing  to  the  pressure  of  time,  this  is  all  that 
I  can  say  now,  but  the  matter  will  be  gone  into  in  the  memorandum 
that  we  shall  present. 

Secretary  McAooo.  Of  course,  these  subjects  that  you  are  discuss- 
ing now  will  be  considered  very  thoroughly  in  the  group  conferences. 
The  roll  was  being  called  to  see  if  there  was  any  subject  of  general 
or  common  interest  which  ought  to  be  brought  before  the  full  Con- 
ference. 

THE  DOMINICAN  REPUBLIC. 

Dr.  FRANCISCO  J.  PEYNADO.  Mr.  Chairman  and  gentlemen,  I  was 
highly  gratified  when  I  heard  the  suggestion  urging  the  parcels  post 
for  reducing  rates,  etc.,  and  I  desire  to  say  that  those  points  have 
been  covered  in  a  proposition  that  has  been  drawn  up  by  the  Domini- 
can Government. 

The  task  of  rapidly  promoting  a  permanent  increase  of  commer- 
cial business  between  the  United  States  and  the  Latin- American 
countries  is  more  than  anything  else  an  educational  one. 

The  war  that  is  devastating  half  of  the  civilized  world  lias  already 
produced,  and  will  continue  to  produce  for  some  time  to  come,  a 
tangible  increase  of  inter- American  commerce,  as  an  inevitable  re- 
sult of  the  closing  of  the  ports  of  Germany  and  of  Austria  and  of 
the  withdrawal  from  the  seas  of  the  merchant  vessels  of  those  two 
nations. 

But  the  paralyzation  of  the  German  and  Austrian  commerce  is 
only  temporary;  and  if  an  educational  campaign,  to  teach  the 
countries  of  Latin- America  that  here  in  the  United  States  are  pro- 
duced or  may  be  produced  all  the  manufactured  goods  formerly  ex- 
ported by  Europe,  is  not  undertaken  at  once  and  with  tenacity  un- 
doubtedly when  the  war  is  over  the  business  will  return  in  great 
part  to  the  channels  it  followed  before  the  war.  This  must  be  true 
for  the  simple  reason  that  so  short  an  experience  with  the  goods  of 
the  United  States,  even  though  it  were  to  be  supported  by  the  good 
will  of  the  Latin- American  Governments,  would  be  impotent  by 
itself  to  destroy  habits  and  prejudices  of  many  years  standing.  This 
result  is  the  more  likely  to  follow  if  little  be  done  to  convince  Latin- 
Americans  that  the  diversion  of  trade  which  came  about  through 
necessity  can  best  be  continued  upon  grounds  of  unquestionable  con- 
venience and  profit. 

In  an  international  educational  campaign  the  most  powerful 
weapon  is  the  post.  An  army  of  traveling  salesmen,  as  big  as  it 
might  be,  can  not  be  compared — either  in  the  rapidity  of  its  effect 


PROCEEDINGS.  137 

or  in  its  ability  to  reach  the  remoter  regions  of  a  country,  or  in  its 
possibility  of  serving  equally  the  small  and  the  large  manufacturers 
and  exporters — with  the  effect  of  letters,  circulars,  and  the  news- 
papers. 

The  efficiency  of  the  post  is  undoubtedly  more  immediately  useful 
to  the  producer  than  to  the  consumer,  and  to  the  manufacturer  than 
to  the  agriculturist ;  and  in  this  respect  the  United  States  should  be 
chiefly  interested  in  such  an  improvement.  As  consumers  of  manu- 
factured goods  and  exporters  chiefly  of  agricultural  products  the 
Latin- Americans  have  little  to  advertise,  since  they  know  that  their 
sugar,  their  cocoa,  their  hemp,  their  rubber,  and  their  coffee  will  be 
sold  here  even  though  not  advertised;  and  naturally  the  Latin- 
Americans  may  not  see  the  necessity  of  undertaking  a  campaign  for 
the  purpose  of  educating  their  own  people  with  regard  to  the  fact 
that  the  goods  they  have  previously  obtained  in  Europe  are  also  to 
be  obtained  in  the  United  States.  But  this  difficulty  could  easily  be 
met  by  providing  that  the  signatory  Governments  should  contribute 
to  the  payment  of  the  general  service  in  proportion  to  the  benefit 
received  by  each. 

In  view  of  these  considerations  the  delegation  of  the  Dominican 
Kepublic  has  the  honor  of  submitting  to  the  conference  the  recom- 
mendation that  a  special  committee  be  appointed  to  study  Latin- 
American  postal  conditions  and  to  propose  to  all  the  Governments  of 
America  a  plan  for  a  Pan  American  postal  convention  which  shall 
include  the  following  provisions : 

1.  That  the  letter  postage  and  the  postage  on  circulars  and  printed 
matter  between  each  and  every  country  of  the  Pan  American  Union 
be  established  upon  the  same  basis  of  rates  as  that  now  existing 
between  the  United  States  and  Cuba  and  Mexico. 

2.  The  adoption  by  all  the  countries  of  the  Pan  American  Union 
of  the  same  rules  and  the  same  rates  for  newspaper  postage  as  that 
now  existing  in  the  United  States. 

3.  The  adoption  by  all  the  countries  of  the  Pan  American  Union 
of  a  uniform  service  of  postal  money  orders  and  parcel  post. 

4.  The  establishment  of  a  Pan  American  postal  commission,  with 
headquarters  in  Panama  City,  which  shall  act  as  a  clearing  house  for 
the  postal  administration  of  all  the  signatory  Governments. 

Secretary  McAooo.  I  wish  to  say  that  all  of  these  addresses  in 
Spanish  will  be  translated  promptly  into  English  and  printed  as 
the  Conference  proceeds,  with  as  much  rapidity  as  possible,  so  that 
you  may  get  the  benefit  of  them  in  both  languages,  and  that  similarly 
addresses  delivered  in  English  will  be  translated  into  Spanish  as 
quickly  as  possible  and  distributed  in  the  Conference  as  rapidly  as 
we  can  turn  them  out.  But,  in  any  case,  in  the  final  publication 


138  PAN   AMERICAN  FINANCIAL  CONFERENCE. 

of  the  proceedings  everything  will  appear  both  in  Spanish  and  in 
English,  and  will  have  general  circulation. 

(The  above  was  interpreted  by  the  Secretary-General.) 

ECUADOR. 

Dr.  JUAN  CUEVA  GARCIA.  Mr.  Chairman,  the  delegation  from 
Ecuador  has  presented  a  memorandum  upon  this  subject,  and  I 
understand  that  we  are  going  to  send  it  to  the  general  committee 
that  is  to  be  appointed.  As  it  covers  a  diversity  of  subjects,  I 
would  request  that  it  be  printed  and  circulated  among  all  the  Latin- 
American  delegates  as  well  as  among  the  invited  Americans  gen- 
erally. As  I  understand  it,  the  delegates  attending  this  Conference 
are  not  empowered  to  sign  treaties  or  pass  laws,  but  I  nevertheless 
hope  that  we  shall  be  in  a  position  to  pass  resolutions  recommending 
some  subjects,  so  that  when  the  group  committees  report  all  the 
delegates  may  be  informed  what  they  are  going  to  discuss. 

Secretary  McADOO.  I  wish  to  make  it  clear  that  these  group  com- 
mittees from  each  country  are  expected  to  discuss  subjects  that 
relate  to  that  particular  country,  and  we  are  leaving  it  to  the  dele- 
gates from  those  countries  to  make  their  own  recommendations  in 
such  form  as  they  desire  to  present  them  for  incorporation  in  the 
final  proceedings  of  the  Conference.  The  general  committee  which 
is  to  be  appointed  this  afternoon  is  to  make  a  report  and  recom- 
mendation with  respect  to  uniform  laws  only,  and  as  a  basis  for  con- 
ferences in  the  future  to  bring  about  that  sort  of  uniformity.  I  will 
ask  the  Secretary-General  to  state  that  in  Spanish  so  that  all  the 
foreign  delegates  may  understand  it. 

Dr.  JUAN  CUEVA  GARCIA.  The  suggestions  made  by  Ecuador  are 
of  a  general  character. 

NICARAGUA. 

Dr.  PEDRO  RAFAEL  CUADRA.  I  beg  to  submit  to  the  Conference  a 
proposal  which  I  consider  of  vital  importance  for  international  trade. 
I  have  observed  in  the  economic  history  of  several  countries,  and 
recently  in  that  of  my  own,  that  an  inflated  currency  is  a  terrible 
handicap  to  the  development  of  international  trade  and  commerce. 
It  is  hard  to  conceive  worse  conditions  than  those  produced  by  the 
unsettling  of  business  based  on  the  shifting  sands  of  a  fiat  money. 
So  I  have  come  to  the  conviction  that  there  is  not,  nor  can  there  be, 
any  chance  at  all  for  closer  economic  relations  between  a  country 
with  a  sound  monetary  system  and  another  without  one.  It  is  not 
advisable  for  any  merchants  or  credit  institutions  to  encourage  their 
business  in  countries  with  inflated  currencies. 


PROCEEDINGS.  139 

For  the  reasons  above  stated,  1  think  that  for  the  Conference  to 
"  develop  practical  results  of  the  most  beneficial  sort  to  our  respec- 
tive countries,  and  even  closer  relationships  between  them,"  as  we 
all  hope,  it  is  absolutely  necessary  to  insist  on  the  international 
advantage  of  a  sound  and  stable  currency  in  every  country,  and  even, 
if  possible,  to  have  the  Conference  declare  that  an  inflated  currency 
is  to  be  considered  an  injury  to  international  commercial  relations. 

Dr.  PABLO  DESVERNINE  Y  GALDOS  (Cuba).  Mr.  Chairman,  I  am 
somewhat  perplexed  in  regard  to  that  general  committee.  Is  it  pro- 
posed that  the  general  committee  shall  make  a  report  as  to  the  ad- 
visability for  uniformity  of  laws,  and  state  the  reforms  that  ought 
to  be  made  in  one  or  two  sessions  ? 

Secretary  McAooo.  I  do  not  think  you  can  do  it  in  one  or  two  ses- 
sions, but  the  idea  was  that  while  you  are  all  here,  representing  your 
different  countries,  you  might  discuss  and  reach  a  conclusion,  as  far 
as  practicable,  as  to  those  laws  regarding  which  you  are  satisfied 
that  uniformity  would  be  advantageous;  and  you  could  make  a 
preliminary  report  covering  as  much  of  the  subject  as  you  could 
agree  upon,  and  that  could  be  used  as  a  basis  for  consideration  by 
the  different  countries  that  are  inclined  to  take  up  the  subject 
seriously  and  elaborate  it  properly.  It  was  simply  to  get  the  matter 
started. 

Dr.  DESVERNINE  Y  GALDOS  (Cuba).  We  have  studied  the  subject 
already.  We  intend  to  state,  and  to  set  forth,  that  we  deem  it  very 
advisable  that  there  should  be  some  uniformity  in  commercial  laws 
and  customs  regulations,  but  of  course  we  had  to  restrict  ourselves  to 
some  generality  in  that  matter  because  going  into  detail  with  other 
countries  makes  it  a  difficult  proposition. 

Secretary  McADOO.  You  can  not  go  into  the  details  of  it,  but  you 
can  discuss  general  propositions  that  would  be  applicable. 

The  calling  the  roll  was  resumed. 

PERU. 
SALVADOR. 
URUGUAY. 
There  were  no  suggestions  to  be  made. 

REMARKS  BY  MEMBERS  OF  THE  CONFERENCE, 

Secretary  McAooo.  I  should  like  very  much  to  have  the  representa- 
tives of  our  country  feel  that  they  may  say  anything  they  care  to 
bring  forward  for  the  consideration  of  the  conference  on  any  subject 
they  may  wish  to  present.  I  shall  make  no  suggestion,  but  I  hope 


140  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

you  will  not  hesitate  to  come  forward  and  contribute  anything  you 
care  to  offer. 

Mr.  Vanderlip,  would  you  care  to  speak  on  the  subject  of  branch 
banking  ? 

Mr.  FRANK  A.  VANDERLIP  (New  York)  : 

Mr.  Chairman  and  Gentlemen  of  the  Conference — I  am  not  pre- 
pared with  any  formal  address  on  the  subject  of  branch  banking. 
As  you  all  know,  the  Federal  reserve  law  has  made  possible  what 
was  never  possible  before — that  is,  branches  of  national  banks  in 
foreign  countries.  We  have  made  some  little  start  at  that,  and  will 
go  a  great  deal  further,  I  hope. 

It  seems  to  me  that  we  are  in  many  ways  in  a  specially  happy 
position  now  to  develop  foreign  branches  and  through  these  to 
develop  foreign  relationships.  This  Federal  reserve  law  has  made 
some  fundamental  changes  in  the  banking  situation  in  the  United 
States.  It  has  not  alone  given  us  permission  to  start  branches,  of 
course,  but  it  has  done  other  things  that  will  be  of  great  advantage 
in  connection  with  these  branches. 

The  position  that  we  are  in  at  the  moment,  in  reference  to  banking 
reserves  in  the  country,  is  a  thing  that  is  worthy  of  note  both  by  our 
visitors  and  by  ourselves.  I  doubt  if  our  own  bankers  have  all  of 
them  considered  clearly  the  full  significance  of  the  present  position 
of  the  surplus  reserves  of  the  country.  I  have  not  the  figures  before 
me,  but  as  I  remember  the  last  report  of  the  Comptroller  of  the 
Currency  shows  a  surplus  reserve  above  the  legal  requirement  of 
about  $734,000,000.  Normally  the  national  banks  of  the  United 
States  have  run  along  with  a  surplus  above  the  legal  minimum  of 
perhaps  60,  TO,  or  100  millions  of  dollars.  The  new  reserve  law 
has  reduced  the  reserve  requirement,  and  we  have  now  as  a  result  of 
that  reduction  of  reserve  requirements,  plus  a  dull  demand,  this 
enormous  surplus  of  $734,000,000  above  the  legal  requirements  in  the 
national  banks  alone.  There  is  a  similar  plethora  of  reserves  in  the 
State  banks.  You  may  say  that  is  merely  a  matter  of  reduction  in 
your  legal  requirements.  It  is  more  than  that,  for  the  Federal  reserve 
law  makes  it  probably  quite  as  safe  banking  to  run  a  bank  with  the 
minimum  reserve  now  provided  as  it  was  to  run  with  the  minimum 
formerly  provided.  That  means,  then,  that  we  have  in  this  country  a 
perfectly  enormous  capacity  for  expansion  of  loans,  and  that  is  the 
point  that  I  wish  to  get  before  your  minds. 

We  can  probably  expand  loans  two  or  three  billions  of  dollars 
with  the  present  reserves,  and,  indeed,  there  is  a  tendency  toward 
augmenting  those  reserves  by  the  importation  of  gold  from  nations 
that  have  a  debit  here  and  find  the  shipment  of  gold  the  only  way  to 
pay  it.  So,  if  we  are  in  a  state  of  unpreparedness  for  war,  we  are  in 


PROCEEDINGS.  141 

• 

a  -state  of  preparedness  for  extending  our  financial  relationships 
abroad  and  for  developing  our  banking  credits  at  home. 

I  think  that  is  a  matter  of  very  great  importance  for  us  to  recognize 
in  considering  the  building  up  of  these  new  relationships  that  we  are 
talking  about  with  South  and  Central  America.  Most  of  those  coun- 
tries are  in  much  the  position  we  were  in  a  generation  ago  as  to  capi- 
tal. They  arei,  indeed,  in  the  position  we  occupied  up  almost  to  the 
present  time,  where  they  must  look  outside  of  their  own  countries 
for  capital. 

We  have  found  heretofore  very  full  employment  for  our  own  capi- 
tal at  home,  but  I  believe  our  growing  wealth  and  this  new  banking 
law  and  other  considerations  are  going  to  open  the  field  and  greatly 
to  increase  our  power  for  making  foreign  investments.  The  sum 
available  for  that  purpose  will  be  vastly  greater  than  we  have  ever  had 
before.  That  is  one  reason  why  I  look  forward  to  results  flowing 
from  this  Conference  and  from  the  interest,  which  is  certainly  as  wide 
as  this  hemisphere,  that  will  grow  into  closer  relations  between  these 
American  countries. 

I  thank  you,  gentlemen.     [Prolonged  applause.] 

Secretary  McADOO.  The  Secretary  of  Commerce  begs  me  to  ex- 
press his  regret  that  a  business  engagement  requires  him  to  leave  at 
this  time. 

I  would  be  very  glad  to  hear  from  anyone  else  from  the  United 
States,  unless  you  prefer,  to  wait  until  to-morrow,  in  which  event 
we  will  proceed  to  announce  the  appointment  of  committees. 

ANNOUNCEMENT  OF  COMMITTEES. 

I  wish  to  say  in  advance  that  the  assignment  of  committees 
has  been  an  extremely  difficult  task.  I  confess  it  has  caused  us  a 
great  deal  of  perplexity.  The  desire  naturally  has  been  to  assign 
the  men  who  have  come  here  to  represent  the  United  States  to  the 
different  countries  in  such  a  way  as  would  bring  the  delegates  from 
other  countries  in  touch  with  men  of  this  country  who  are  some- 
what familiar  with  the  problems  of  those  States  to  which  they  are 
assigned ;  but  it  has  not  been  possible  to  find  in  our  own  land  a  suffi- 
cient number  of  men  who  are  familiar  with  the  problems  of  the 
nations  to  which  we  have  been  compelled  to  assign  them. 

Of  course,  this  Conference  is  intended  to  be  educational,  anyway. 
It  is  expected  to  be  educational  to  the  men  who  participate  in  it  as 
well  as  to  the  people  of  the  various  countries  represented  here. 
Therefore  I  hope  that,  although  many  of  the  American  delegates 
may  be  unfamiliar  with  the  problems  of  our  good  friends  from 
South  and  Central  America,  they  will  yet  learn  from  these  round- 
table  conferences  something  of  one  another;  and  that,  as  a  result, 


142  PAN  AMERICAN"  FINANCIAL  CONFERENCE. 

the  reports  we  shall  get  from  these  group  committees,  and  which 
will  be  embodied,  as  I  said  before,  in  the  proceedings  of  the  confer- 
ence, may  be  of  very  great  value  in  furnishing  information  useful  to 
everyone.  I  do  not  mean  to  say  that  every  discussion  that  occurs  in 
these  group  committees  has  to  be  reported,  but  such  of  the  subjects 
as  you  do  discuss,  which  you  think  it  will  be  useful  to  incorporate  in 
the  proceedings  of  this  Conference,  we  should  like  to  h-ave  you  report 
upon  fully. 

And  I  want  to  ask  those  gentlemen  who  are  here  from  the  United 
States  if  they  will  be  good  enough  to  remain  the  full  week  and  in 
every  way  they  possibly  can  help  our  foreign  visitors.  These  visitors 
have  come  a  long  way,  with  the  expectation  that  we  will  get  down 
to  a  serious  basis  of  discussion  and  that  we  will  all  join  in  trying  to 
get  practical  results  from  this  Conference.  I  am  satisfied  that  we 
can  get  such  results,  but  the  only  way  to  do  so  is  by  a  thorough  and 
comprehensive  discussion. 

And  I  therefore  wish  to  urge  upon  the  men  who  are  here  from 
our  own  country,  not  only  as  a  matter  of  interest  but  also  as  a  matter 
of  courtesy  to  our  guests,  that  they  will  stay  and  join  with  them  in 
a  complete  study  of  the  various  subjects  that  will  come  before  the 
group  committees. 

Now,  before  I  announce  these  committees  I  should  like  the  Secre- 
tary General  to  call  the  roll  of  the  South  and  Central  American 
countries  again,  and  let  them  indicate  the  name  or  names  of  the 
gentlemen  they  wish  to  represent  them  on  the  Joint  Committee  on 
Uniform  Laws  that  I  have  spoken  about. 

(The  Secretary-General  thereupon  called  the  roll.) 

UNIFORMITY  OF  LAWS  COMMITTEE. 

The  SECRETARY- GENERAL,  DR.  HOWE:  General  Committee  on  Uni- 
formity of  Laws  relating  to  Trade,  Commerce,  and  International 
Commercial  Court.  (With  special  reference  to  such  matters  as  trade- 
marks and  patents,  consular  invoices,  bills  of  lading,  regulations  of 
commercial  travelers,  admission  of  samples,  bills  of  exchange,  uni- 
form monetary  standards,  etc.) 

This  committee  is  made  up  of  one  representative  elected  by  each 
foreign  delegation,  as  follows: 

Hon.  WILLIAM  C.  REDFIELD,  Chairman. 

Dr.  SAMUEL  HALE  PEARSON,  Argentina. 

Dr.  IGNACIO  CALDER6N,  Bolivia. 

Dr.  AMABO  CAVALCANTI,  Brazil. 

Dr.  Luis  IZQUIERDO,  Chile. 

Dr.  SANTIAGO  PEREZ  TRIANA,  Colombia. 

Dr.  ROBERTO  ANcfzAB,  Colombia. 

Dr.  JOHN  M.  KEITH,  Costa  Rica. 


PROCEEDINGS.  143 

Dr.  PABLO  DESVEBNINE  Y  GAU>6s,  Cuba. 

Dr.  FEANCISCO  J.  PEYNADO,  Dominican  Republic. 

Dr.  VICENTE  GONZALES  B.  Ecuador. 

Dr.  JUAN  S.  LAKA,  Guatemala. 

Dr.  LEOPOLDO  C6RDOVA,  Honduras. 

Dr.  PEDRO  RAFAEL  CUADEA,  Nicaragua. 

Dr.  RAMON  F.  ACEVEDO,  Panama. 

Dr.  WILLIAM  WALLACE  WHITE,  Paraguay. 

Dr.  ISAAC  ALZAMORA,  Peru. 

Dr.  ALFONSO  QUINONEZ  M.  Salvador. 

Dr.  CARLOS  MAR! A  DE  PENA,  Uruguay. 

Dr.  PEDRO  RAFAEL  RINCONES,  Venezuela. 

Members  representing  the  United  States : 

Hon.  CHARLES  S.  HAMLIN, 

Hon.  JOHN  BARRETT, 

Hon.  CHARLES  M.  CONANT, 

Hon.  D.  R.  FRANCIS, 

Hon.  JOHN  HAYS  HAMMOND, 

Hon.  JOHN  BASSETT  MOORE, 

Hon.  ROBERT  W.  WOOLLEY, 

Mr.  GEORGE  N.  NUMSEN, 

Mr.  W.  L.  SAUNDERS, 

Mr.  WILLARD  STRAIGHT, 

Mr.  SAMUEL  UNTERMYER,  and 

SUGGESTION  'AS  TO  CREATION  OF  COMMITTEE  ON  TRANS- 
PORTATION. 

Dr.  PEARSON  (Argentina).  Mr.  President,  before  finishing  the  ses- 
sion of  to-day  I  would  like  to  say  that  this  morning  we  heard  with 
great  pleasure  and  satisfaction  the  words  of  His  Excellency  the  Presi- 
dent of  the  United  States  with  regard  to  the  ability  to  strengthen 
the  relations  between  our  countries  of  North,  Central,  and  South 
America  if  we  had  fast  and  good  steamship  communications.  I  am 
sure  that  every  one  of  us  here  present — I  mean  of  all  the  Americas — 
would  be  very  pleased  if  the  honorable  Secretary  of  the  Treasury 
would  name  a  special  commission  of  a  few  of  the  principal  citizens 
and  most  interested  men  who  could  give  the  best  ideas  as  to  how  to 
form  this  combination  of  North,  Central,  and  South  America,  united 
in  a  special  commission  that  we  might  call  the  "  Commission  on  fast 
navigation,"  to  work  out  a  plan  whereby  with  individual  capital  or 
with  the  help  of  our  Governments  we  could  in  a  short  time  see  a 
powerful  steamship  line  that  would  help  us  to  develop  our  common 
intercourse  and  at  the  same  time  know  that  we  would  be  free  from 
having  to  depend  on  European  powers  for  the  transportation  of  our 
merchandise  and  also  to  bring  us  here  and  to  take  you  south,  as  we 
want  all  the  Americas  to  know  each  other  as  we  have  been  accus- 
tomed to  knowing  Europe.  [Applause.] 


144  PAN  AMERICAN   FINANCIAL  CONFERENCE. 

Secretary  McAooo.  The  suggestion  of  Dr.  Pearson  is  a  very 
valuable  one,  and  it  strikes  me  as  a  thing  that  we  could  probably  do- 
that  is,  to  appoint  a  committee  to  give  special  consideration  to  this 
question  of  transportation. 

I  shall  be  very  happy  if  the  delegates  from  South  and  Central 
America  consider  overnight  whom  they  would  like  to  have  appointed 
on  such  a  committee,  and  at  the  session  to-morrow  morning  it  can  be 
announced. 

I  do  not  know  whether  you  mean,  Dr.  Pearson,  that  there  shall 
be  a  member  of  that  committee  from  each  of  the  countries  repre- 
sented here? 

Dr.  PEARSON.  No,  sir.  I  think  if  we  take  the  extremes,  we  will 
find  that  the  countries  in  between  would  always  be  pleased  with  what 
we  can  do  for  them.  So  that  if  we  take  the  extreme  north  and  the 
extreme  south  and  two  or  three  of  the  principal  representatives 
there,  I  think  that  will  be  sufficient. 

Secretary  McADOO.  I  did  not  understand  to  what  extent  the  cen- 
tral American  Governments  are  concerned  in  this  steamship  ques- 
tion, and  it  was  for  that  reason  that  I  was  asking  you  what  you  had 
in  mind. 

Dr.  PEARSON.  My  idea  for  South  America  was  Chile,  Argentina, 
Brazil,  and  Uruguay. 

Secretary  McADOO.  Would  you  not  extend  that  to  Peru? 

Dr.  PEARSON.  Well,  Peru  has  a  good  service  now  with  the  Isthmus. 
But  I  mean  those  countries  where  they  have  not/ 

Secretary  McADOO.  Then  if  you  will  be  prepared  to-morrow  morn- 
ing, gentlemen,  to  suggest  the  names  that  you  would  like  to  have  on 
that  committee  I  shall  be  very  glad  to  appoint  them. 

Unless  there  is  something  else  some  gentleman  would  like  to  bring 
before  the  Conference,  we  will  adjourn  until  to-morrow  morning  at 
10  o'clock  in  this  hall. 

(Accordingly,  at  5.10  o'clock  p.  m.,  the  Conference  adjourned.) 


THIRD  SESSION 


TUESDAY  MORNING.  MAY  25,  1915 


98257°— 15 10  145 


THIRD  SESSION,  TUESDAY  MORNING,  MAY  25. 


The  Conference  met  at  10  o'clock  a.  m.,  and  was  called  to  order  by 
the  Honorable  William  G.  McAdoo. 

ANNIVERSARY  CONGRATULATIONS  TO  ARGENTINA. 

Secretary  McAooo.  Gentlemen,  I  want  to  say  a  few  words  this 
morning,  and  I  have  put  them  in  writing,  because  I  want  to  have 
them  translated  into  Spanish  by  the  Secretary  General. 

My  mind  carries  me  back  this  morning  to  that  memorable  week  in 
May,  1810,  when  the  patriots  of  what  is  now  the  Argentine  Republic 
were  debating  as  to  how  they  might  best  meet  the  crisis  that  had 
arisen  in  the  affairs  of  their  country.  In  reading  the  proceedings  of 
that  memorable  May  day  one  can  not  help  but  feel  a  deep  sympathy 
with  the  perplexities  and  even  with  the  doubts  with  which  the  leaders 
were  beset.  For  a  time  it  was  not  entirely  clear  to  them  what  course 
they  should  pursue,  but  in  the  midst  of  all  these  troubles  there  shines 
forth  that  devotion  to  their  country  and  to  the  public  welfare  which 
soon  illumined  the  path  they  were  to  tread. 

To-day  it  is  our  privilege  to  do  honor  and  homage  to  those  great 
leaders  whose  brethren  were  carrying  on  similar  struggles  in  the 
other  Spanish  colonies.  I  am  but  expressing  what  is  in  the  minds 
of  all  of  you  when  I  extend  our  warm  congratulations  on  the  occa- 
sion of  this  glorious  anniversary  to  his  Excellency,  the  Argentine 
ambassador,  and  to  each  and  every  member  of  the  Argentine  dele- 
gation, and  I  propose  for  your  consideration  that  a  congratulatory 
cablegram  be  sent  by  this  Conference  to  the  President  of  the  Argen- 
tine Republic.  [Applause.] 

The  cablegram  that  I  would  suggest  is  as  follows : 

His  Excellency,  DR.  VICTORINO  DE  LA  PLAZA, 

President  of  Argentina,  Buenos  Aires. 

The  Pan  American  Financial  Conference,  assembled  in  Washington,  joins 
with  you  in  celebrating  this  glorious  anniversary  of  Argentine  independence. 
We  extend  to  the  Government  and  people  of  Argentine  our  warmest  congratu- 
lations and  our  sincerest  wishes  for  the  happiness  and  prosperity  of  the  Ar- 
gentine nation. 

It  is  suggested  that  the  cablegram  be  signed  by  the  presiding 
officer  on  behalf  of  this  assembly.  Gentlemen,  while  this  is  not  a  con- 
vention, I  am  going  to  consider  it  one  for  the  purpose  of  asking  a 

147 


148  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

vote  on  this  cablegram,  and  I  would  suggest  that  we  vote  by  rising. 
Those  in  favor  of  sending  this  message  will  rise. 

(The  Conference  unanimously  rose.) 

Secretary  McAooo.  As  I  observe  that  there  are  none  opposed,  1 
declare  that  it  is  unanimously  adopted,  and  the  cablegram  will  be 
sent.  [Applause.] 

Dr.  RICARDO  C.  ALDAO  (Argentina).  Mr.  Chairman  and  gentlemen, 
I  am  extremely  sorry  not  to  command,  as  I  would  like,  the  English 
language,  in  order  that  I  might  avail  myself  of  this  opportunity  to 
express  all  of  the  feelings  of  my  heart  and  also  to  express  the  sym- 
pathy of  Argentina,  both  of  the  people  and  of  the  Government  in 
this  matter — a  splendid  proof  of  American  solidarity.  I  can  simply 
say  I  am  confident  that  all  of  the  people  of  Argentina  fully  ap- 
preciate and  are  grateful  for  the  message  which  has  been  read.  Mr. 
Chairman,  please  accept  the  heartfelt  feeling  of  the  Argentine 
people.  Thanks ;  many  thanks.  [Applause.] 

DESIGNATION  OF  GENERAL  COMMITTEES. 

Secretary  McADOO.  Upon  further  consideration  of  the  committee 
which  was  appointed  yesterday  to  consider  uniformity  of  laws  and 
to  make  report  as  to  what  seems  practicable  in  that  direction  as  a 
basis  for  further  action,  the  suggestion  was  made  to  me  last  evening 
after  adjournment  by  a  number  of  gentlemen  that  the  duties  of  that 
committee  might  very  properly  and  with  great  advantage  be  made 
to  include  the  question  of  the  creation  of  an  international  commercial 
court  for  the  settlement  of  differences  that  may  arise  between  citi- 
zens of  the  different  countries;  I  mean  in  the  matter  of  trade  dis- 
putes, etc.  I  have  no  time  this  morning,  and  I  shall  not  weary  you 
with  an  elaboration  of  the  idea,  but  it  is  one  that  seems  to  me  to 
possess  great  merit,  and  I  wish  to  ask  that  committee  if  it  will  not 
take  up  that  very  important  proposition.  I  think  it  could  be  done 
with  advantage,  and  perhaps  we  could  formulate  some  ideas  here 
that  would  mean  the  germ  of  something  very  substantial  and  prac- 
ticable. I  want  to  add  to  that  committee  Mr.  Benjamin  Strong,  jr., 
of  New  York,  and  I  should  be  very  glad  if  Mr.  Strong  would  serve. 

Dr.  Pearson  just  before  the  adjournment  yesterday  made  some 
suggestions  about  a  committee,  and  I  ask  if  he  will  be  good  enough 
to  tell  me  this  morning  at  greater  length  what  his  ideas  are  as  to 
the  countries  he  thinks  should  be  included  in  that  committee.  Dr. 
Pearson,  if  you  have  thought  it  over  and  have  any  additional  sug- 
gestions to  make  before  we  take  action,  I  shall  be  happy  to  hear 
from  you. 

Dr.  PEARSON  (Argentina).  Mr.  Chairman,  the  idea  in  forming  a 
committee  was  to  include  Central  America,  so  very  well  served  to-day 


PROCEEDINGS.  149 

by  the  different  steamship  lines,  especially  the  United  Fruit  Com- 
pany. My  chief  object  was  in  seeing  if  this  company  could  not 
extend  its  service,  with  the  help  of  the  governments  of  the  different 
countries,  farther  south.  They  have  a  very  fine  line  of  steamers. 
We  came  over  from  Colon  to  New  York,  and  I  think  such  an  exten- 
sion would  be  very  easy,  knowing  as  I  do  that  all  the  governments 
of  South  America  are  anxious  to  come  to  a  favorable  understanding 
with  respect  to  the  matter. 

I  think,  as  to  the  Pacific  coast,  Chile  and  Peru  might  represent 
that  side  of  the  continent,  and  on  the  Atlantic  we  can  have  Brazil, 
Uruguay,  and  the  Argentine  Republic,  being  the  three  most  distant 
southern  countries. 

I  would  suggest,  if  it  meets  the  approval  of  the  chairman,  that  the 
committee  might  be  formed  to  represent  those  five  South  American 
countries,  and,  of  course,  any  American  citizen  that  you  might 
indicate. 

Dr.  VERGAKA  BULNES  (Chile).  Mr.  Chairman,  when  I  was  invited 
by  the  Government  of  the  United  States  to  attend  this  Conference 
it  was  supposed  that  one  of  the  most  important  points  to  be  decided 
was  the  establishment  of  a  fast  steamship  service  from  the  far 
Chilean  ports  to  ports  of  the  United  States.  This  was  confirmed 
by  the  very  well  considered  suggestion  made  by  the  Secretary  of  the 
Treasury  to  this  Conference.  So  in  the  name  of  my  colleagues  of  the 
Chilean  delegation  I  may  say  that  we  will  take  the  greatest  pleasure 
in  participating  in  the  work  of  this  committee,  and  we  will  be  very 
glad  to  have  that  idea  incorporated  here. 

Secretary  McADOO.  The  Chair  will  be  very  happy  to  appoint  such 
a  committee,  and  I  will  ask  the  delegates  from  the  five  countries 
suggested,  which  seem  to  be  most  interested  in  the  problem,  whom 
they  would  like  to  have  put  upon  that  committee.  I  shall  first  ask 
the  delegates  from  Argentina. 

Dr.  PEARSON  (Argentina).  Mr.  Chairman,  we  of  Argentina  con- 
sider this  matter  one  of  the  very  important  points  to  be  treated  by 
this  Conference ;  and  we  thought,  as  we  were  only  going  to  be  here  a 
few  days,  that  we  would  all  like  to  form  a  part  of  this  commission 
for  the  short  time  that  we  are  to  remain  and  then,  as  I  do  not  think 
it  would  be  possible  to  have  a  thorough  understanding  within  a 
week,  Mr.  Zimmermann,  who  is  one  of  the  delegates  from  Argentina 
and  who  lives  here,  might  continue  to  represent  our  country.  If  there 
is  no  objection,  I  would  be  glad  to  have  that  done. 

Secretary  McADOO.  We  quite  agree.  I  do  not  know,  Mr.  Pearson, 
that  with  the  work  of  these  various  group  committees  it  will  be  pos- 
sible or  practicable  to  work  things  out  if  every  one  of  the  delegates 
go  on  this  committee.  I  suppose  you  can  divide  the  work  up  in  some 
way.  I  assume  that,  so  far  as  Argentina  is  concerned,  all  of  the 


150  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

members  representing  Argentina  would  serve.  As  to  Chile,  whom  do 
you  desire  to  have  on  the  committee — the  full  delegation  ? 

Dr.  VERGARA  BULNES  (Chile).  Yes. 

Secretary  McADoo.  And  I  assume  the  same  with  respect  to  Brazil  ? 

Dr.  PEARSON  (Argentina).    There  is  only  one  delegate. 

Secretary  McADoo.  Yes;  but  he  is  a  whole  regiment  in  himself. 
I  assume  the  same  for  Peru.  As  to  Uruguay,  does  the  entire  delega- 
tion wish  to  go  on  this  committee  ? 

Dr.  TERRA  (Uruguay).  In  the  memoranda  presented  by  Uruguay 
to  the  Conference  preference  is  given  to  a  study  for  the  facili- 
tation of  commercial  intercourse  between  the  American  nations 
by  the  development  of  shipping.  The  delegates  of  Uruguay  have 
had  the  opportunity  of  realizing  the  difficulties  which  American 
countries  meet  in  effecting  closer  relations.  These  delegates  made  a 
journey  of  a  month.  They  had  to  cross  the  summits  of  the  Andes. 
They  encountered  in  their  path  every  sort  of  difficulty,  and  they  see 
well  that  we  will  never  arrive  at  American  solidarity  such  as  we  all 
desire,  at  that  great  commercial  and  intellectual  solidarity,  unless 
navigation  be  improved  in  every  way  possible.  With  that  in  view, 
this  delegation  has  proposed  to  the  Conference  to  diminish  or  to 
abolish  all  taxes  on  navigation,  on  beacons  and  lighthouses,  and,  if 
it  is  possible,  the  subvention  of  companies  which  would  facilitate  this 
commercial  intercourse.  Uruguay  desires  to  participate  in  anything 
that  may  be  done  along  these  lines.  That  is  all  I  had  to  say.  [Ap- 
plause.] 

Dr.  CUEVA  GARCIA  (Ecuador).  Mr.  Chairman,  I  want  to  ask  that 
Mr.  Gonzales  of  our  delegation  be  added  to  this  special  committee  that 
has  been  suggested  by  Mr.  Pearson.  We  are  a  small  country,  but 
we  are  large  producers  of  agricultural  products,  and  we  are  in 
the  most  horrible  condition  that  any  nation  in  America  is.  We 
realize,  and  it  is  a  thing  that  you  should  know,  that  we  have  until  a 
very  few  years  ago,  when  the  Peruvian  Steamship  Co.  was  estab- 
lished, paid  $100  for  first-class  transportation  from  Guayaquil  to 
Panama,  That  is  800  miles  only,  while  you  pay  $70  or  $75  from 
Panama  to  New  York,  and  that  is  2,000  miles.  You  pay  $75  or  $100 
for  transportation  from  here  to  Europe,  3,000  miles.  We  have  to 
pay  even  more  than  that  for  800  miles.  We  have  been  paying  $100. 
There  is  only  one  company,  an  English  company,  making  our  coast 
service.  The  rates  for  transportation  of  our  crops  are  a  real  scan- 
dal, and  this  English  company  has  taken  advantage  of  this  mo- 
ment to  increase  them  still  more.  They  have  added  £1  sterling  on 
every  100  pounds  of  cocoa  that  we  export.  That  is  awful,  and  we  do 
not  know  how  to  get  out  of  it.  If  the  Atlantic  side  is  going  to  arrange 
something  about  steamship  companies,  that  is  all  right.  We  are  on  the 
Pacific  side  and  can  not  help  that,  but  Peru  and  Chile  are  going  on 


PKOCEEDINGS.  151 

this  committee,  and  I  think  we  also  should  be  represented.  Argentina 
has  some  kind  of  transportation  even  up  into  Paraguay.  Chile  has 
a  line.  Peru  has  a  line.  We  have  none.  We  have  cocoa;  we  have 
hats ;  we  have  rubber ;  we  have  coffee ;  we  are  the  producers  of  nearly 
all  the  fruit  that  goes  to  the  Pacific  side  from  Central  America  to 
the  South  Pole,  and  we  have  no  way  of  transporting  anything. 

Some  years  ago  the  Isthmian  Canal  Commission,  while  I  was  a 
resident  commissioner  in  Panama,  agreed  with  me  to  buy  our  prod- 
ucts, especially  potatoes.  We  produce  a  very  large  quantity  of  these 
in  the  interior,  and  we  could  produce  one  hundred  times  the  amount. 
They  agreed  to  buy  our  potatoes  at  the  same  price  they  buy  the  Eng- 
lish potatoes,  brought  from  England,  3,000  or  4,000  miles,  while  we 
were  only  800  miles  distant.  The  price  of  potatoes  in  Ecuador  is 
practically  nothing.  We  were,  however,  unable  to  put  these  potatoes 
in  Panama  at  any  price  that  would  look  like  competition  with  the 
English  exports,  just  on  account  of  the  lack  of  transportation  facili- 
ties. 

We  produce  a  very  large  quantity  of  oranges.  These  oranges  are 
really  worth  nothing  in  Ecuador.  The  price  is  very  small.  We  pay 
something  like  20  cents  for  every  100  oranges.  We  wanted  to  send 
our  oranges  to  Panama.  We  started  to  make  a  calculation.  English 
oranges  and  San  Francisco  oranges  and  Florida  oranges  sold  in  Pan- 
ama at  $4  for  every  thousand.  We  could  not  put  our  oranges  from 
Guayas  River  into  the  port  of  Balboa,  the  Canal  Zone,  for  less  than 
$10.50  per  thousand.  You  must  consider  that  if  there  is  any  country 
that  is  suffering  on  account  of  transportation  we  are  that  country, 
and  we  can  not  develop  our  exports.  We  can  not  increase  our  pro- 
duction. We  have  no  way  of  getting  it  out.  I  therefore  suggest,  Mr. 
Chairman,  that  if  you  allow  seven  men  to  have  part  in  this  special 
committee  on  transportation,  that  Mr.  Gonzales,  or  our  delegation, 
be  also  appointed  a  member.  I  do  not  think  one  man  more  or  less 
will  make  any  difference.  [Applause.] 

Secretary  McADOo.  Gentlemen,  as  I  conceive  the  purpose  of  Dr. 
Pearson's  suggestion,  it  is  that  a  committee  shall  be  appointed  simply 
to  canvass  the  situation  and  report  existing  conditions,  and  suggest, 
if  possible,  any  remedies,  either  by  private  capital  or  otherwise; 
that  is,  to  survey  the  field  in  any  way  it  can  and  report  on  it,  and  I 
assume  there  will  be  no  objection  to  a  representative  of  Ecuador 
being  on  that  committee.  I  see  that  you  assent  to  that,  and  I  am  very 
glad. 

I  may  say,  further,  that  as  to  countries  which  are  not  represented, 
they  can  present  to  this  committee  any  facts  that  may  occur  to  them 
which  they  think  bear  upon  their  own  particular  situation.  I  know 
it  is  difficult  to  get  a  good  working  arrangement  where  committees 


152  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

are  too  large,  and  I  would  suggest,  therefore,  that  the  committee 
as  suggested,  of  the  six  South  American  countries,  be  appointed; 
and  they  will  be  so  appointed,  and  I  shall  appoint  for  the  United 
States  the  following  members: 

Hon.  Edward  N.  Hurley,  of  the  Federal  Trade  Commission;  Mr. 
R.  Goodwin  Rhett,  of  the  United  States  Chamber  of  Commerce ;  Mr. 
Paul  Fuller,  of  New  York;  Mr.  Franklin  Q.  Brown,  of  New  York; 
Mr.  George  W.  Norris,  of  Philadelphia;  Mr.  Harry  A.  Wheeler,  of 
Chicago;  Mr.  J.  G.  White,  of  New  York. 

I  think  seven  men  will  probably  be  a  sufficient  number  to  repre- 
sent the  United  States  in  these  discussions,  and  I  hope  the  com- 
mittee may  be  able  to  perform  a  useful  service  in  discovering  and 
presenting  the  real  problem  and  suggesting  all  possible  remedies  for 
it,  for  the  consideration  of  the  people  of  the  countries  concerned. 

ORDER  OF  THE  DAY. 

Now,  gentlemen,  we  will  proceed  with  the  order  of  the  day.  I 
may  say  that  after  certain  speeches  that  are  to  be  made  by  members  of 
the  Federal  Reserve  Board,  who  have  been  good  enough  to  respond  to 
the  invitation,  there  will  be  opportunity  for  general  discussion  as 
before. 

After  the  close  of  this  session  the  group  conference  committees 
will  begin  their  work  this  afternoon.  There,  of  course,  will  be  other 
general  sessions  of  the  Conference,  as  indicated  by  the  program,  so 
that  anyone  who  does  not  care  to  speak  this  morning  will  have  an 
opportunity  to  do  so  later. 

I  now  have  the  honor  and  pleasure  of  introducing  to  you  the  gov- 
ernor of  the  Federal  Reserve  Board.  The  question  of  finance,  of 
course  is  an  important  one,  and  he  has  agreed  to  speak  to  you  on  the 
new  act  which  has  been  passed  by  the  Congress  of  this  country, 
and  which  we  think  may  be  utilized  for  the  benefit  of  our  foreign 
commerce  to  a  greater  degree  than  ever  before. 

ADDRESS  OF  HON.  CHARLES  S.  HAMLIN,  GOVERNOR  OF  THE 
FEDERAL  RESERVE  BOARD. 

Mr.  CHAIRMAN  AND  GENTLEMEN: 

This  Conference  of  the  sovereign  nations  of  the  Western  Hemis- 
phere with  the  Secretary  of  the  Treasury  of  the  United  States  is  an 
event  of  deep  significance  to  the  whole  civilized  world. 

If  your  deliberations  are  successful  it  will  not  only  add  to  the 
prestige  of  the  nations  involved  and  to  the  distinction  of  the  dele- 
gates, but,  as  well,  it  will  add  another  achievement  to  the  many 
already  to  the  credit  of  the  Secretary  of  the  Treasury,  and  will  place 


PROCEEDINGS.  153 

another  laurel  wreath  upon  the  brow  of  the  President  for  his  vic- 
tories in  the  cause  of  peace. 

The  scope  of  your  deliberations,  necessarily  limited  to  the  subjects 
assigned  for  discussion,  need  have  been  limited  only  by  the  confines 
of  human  knowledge.  When  we  consider  the  achievements  of  the 
nations  whose  representatives  are  gathered  here  we  realize  what  a 
wealth  it  constitutes,  for  you  could  speak  with  authority  upon  the 
achievements  of  your  citizens  in  the  realms  of  science,  philosophy, 
art,  music,  education,  history,  medicine,  or  international  law,  as  well 
as  upon  the  questions  you  have  come  together  to  discuss.  That  limi- 
tations necessarily  had  to  be  imposed  upon  your  deliberations,  thereby 
restricting  them  to  the  field  of  commerce,  transportation,  and  finance, 
is  perhaps,  after  all,  an  advantage,  for  to  discuss  the  many  important 
contributions  to  the  world's  advancement  made  by  those  nations 
would  require  such  time  that  from  the  very  nature  of  things  it  could 
not  be  given. 

I  take  it  that  the  object  of  every  government  is  to  secure  the 
greatest  good  of  the  greatest  number  of  its  people,  and  I  believe  the 
world  realizes  to-day  that  the  prosperity  of  the  people  of  one  nation, 
in  the  long  run,  tends  to  the  prosperity  of  those  of  other  nations, 
while  the  adversity  of  one  people  must  ultimately  tend  to  the  adver- 
sity of  others.  Just  as  the  individual  prospers  best  when  his  country 
prospers,  so  the  nation  prospers  best  out  of  the  prosperity  of  all 
nations.  [Applause.] 

In  past  centuries  this  great  truth  was  not  realized.  On  the  con- 
trary, it  was  boldly  advanced  by  thinkers  and  philosophers  that  each 
man  is  arrayed  against  his  fellow  man;  that  the  gain  of  the  one 
is  the  exact  measure  of  the  loss  to  the  other;  that  competition  be- 
tween individuals,  whether  in  warfare  or  in  commerce,  must  ulti- 
mately mean  the  destruction  of  the  weaker  and  the  gain  of  the 
stronger.  So,  also,  it  was  believed  that  as  between  sovereign  nations 
the  precise  measure  of  the  gain  to  one  from  international  trade  was 
the  measure  of  the  loss  to  the  other. 

Fortunately,  however,  such  doctrines  have  not  survived,  and  when 
occasionally  they  show  their  heads  above  the  surface  they  are  recog- 
nized as  but  temporary  deviations  from  well-established  rules  of 
action.  The  world  recognizes  to-day  that  sympathy  and  cooperation 
are  the  most  powerful  factors  in  working  out  the  social  and  indus- 
trial welfare  of  the  individual,  and  that  the  same  principles  apply 
to  the  relations  of  one  sovereign  nation  to  another. 

Furthermore,  the  fact  so  cogently  pointed  out  by  Adam  Smith,  the 
great  economist,  that  both  nations  gain  by  dealings  in  international 
trade  is  now  accepted  by  all  nations  as  a  guiding  principle,  although, 
to  be  sure,  many  nations  have  somewhat  obscured  the  principle  by 


154  PAN"  AMERICAN  FINANCIAL  CONFERENCE. 

the  levying  of  customs  duties  upon  imports  far  above  any  possible 
need,  either  for  revenue  or  for  industrial  development. 

It  is  also  true  that  the  nations  to-day  are  beginning  to  recognize 
that  they  have  products,  whether  of  agriculture  or  manufacture, 
which  they  can  create  in  such  quantities  that  they  are  obliged  to  seek 
and  obtain  for  them,  or  for  a  portion  of  them,  foreign  markets. 
They  further  realize  that  they  must  accept,  in  great  measure,  as  pay- 
ment for  their  exported  products,  goods  imported  from  these  coun- 
tries purchasing  their  exports  or  from  other  countries  for  their 
account.  In  other  words,  speaking  generally,  every  bale  of  goods 
exported  from  a  country  must  be  paid  for  by  a  bale  of  goods  im- 
ported into  the  country.  The  actual  payment  may  be  made  by  the 
delivery  of  so-called  "  bills  of  exchange,"  but  these  bills  of  exchange, 
in  a  very  large  measure,  are  but  symbols  of  property  or  are  a  claim 
for  money  based  upon  the  sale  of  property.  The  merchant  ships  his 
goods  abroad,  but  he  sells  the  bill  he  draws  upon  the  foreign  pur- 
chaser to  some  domestic  bank,  and  these  bills,  representing  property, 
are  used  to  offset  similar  bills  drawn  by  foreign  sellers  against  im- 
ports into  the  country.  If  the  exports  and  imports  of  the  country 
do  not  furnish  bills  of  exchange  enough  to  balance,  then  gold  or  its 
equivalent  is  used  or,  perhaps,  loans,  but  these  latter  play  a  relatively 
minor  part  in  international  exchanges. 

It  would  be  impossible  for  a  country  to  shut  itself  off  from  other 
countries  and  still  hope  to  continue  its  exports,  receiving  payment  in 
gold  instead  of  in  goods.  If  we  assume — what  is  impossible  of  real- 
ization— that  any  country  could  shut  off  its  imports  and  continue  to 
export,  receiving  gold  for  its  exports,  within  a  very  few  years  it 
would  cripple  the  exchange  system  of  all  foreign  countries  by  the 
amount  of  gold  it  would  take  from  them,  but  long  before  that  point 
could  be  reached  the  importation  of  gold  would  so  raise  prices  as  to 
effectually  stop  its  exports. 

Trade,  as  now  generally  recognized,  means  buying  as  well  as  sell- 
ing, and  in  so  far  as  this  conference  has  to  do  with  trade  and  with 
the  means  and  methods  for  increasing  trade,  it  has  to  do  with  the  in- 
crease of  buying  as  well  as  with  the  increase  of  selling. 

We  all  recognize  to-day  the  real  interdependence  of  nations ;  they 
are  especially  interdependent  from  the  aspect  of  trade  and  commerce. 
The  nation  of  large  resources  recognizes  that  in  the  long  run  it  is  for 
its  own  profit  to  strengthen  this  interdependence  by  furnishing  the 
nation  of  smaller  resources  means  to  meet  trade  indebtedness  to  it. 
It  should  never  be  forgotten,  however,  that  in  the  long  run  this  in- 
debtedness must  be  met  by  the  shipment  of  goods,  whether  from  the 
debtor  country  or  from  some  other  country,  for  its  account,  to  the 
creditor  country. 


PROCEEDINGS.  155 

The  question,  "however,  which  must  be  foremost  in  your  minds  is 
just  what  the  United  States  can  do  in  assisting  other  nations  to 
finance  their  trade  movements,  both  with  the  United  States  and  with 
the  other  nations  of  the  world.  As  to  the  amount  of  capital  at  pres- 
ent available  in  the  United  States  for  such  purposes  and  the  work- 
ing out  in  detail  of  any  specific  plans  or  suggestions  it  is  not  my 
province  to  speak.  I  shall  leave  that  field  open  to  the  delegates  as- 
sembled here,  and  especially  to  my  colleague,  the  Honorable  Paul  M. 
Warburg,  who  can  speak  with  the  authority  of  a  master  on  every 
detail  of  international  finance.  [Applause.] 

The  message  which  I  wish  to  bring  to  you  to-day,  however,  is  that 
the  United  States  was  never  before  in  such  a  position  as  it  occupies 
to-day  to  reach  out  and  extend  its  trade  by  granting  credit  to  those 
nations  who  wish  to  be  its  customers. 

The  dislocation  of  foreign  trade  caused  by  the  present  war  fur- 
nishes the  United  States  with  a  great  opportunity,  inasmuch  as 
nations  which  for  generations  have  had  the  relation  of  purchaser  and 
seller  now  find  these  relations  disrupted. 

The  United  States  also  has  but  recently  placed  itself  upon  a  sound 
financial  foundation  by  enacting  a  new  banking  system,  which,  to- 
gether with  the  reform  laws  already  enacted,  I  believe  will  constitute 
one  of  the  strongest  systems  in  the  world.  [Applause.] 

Furthermore,  the  new  system  of  banking  inaugurated  by  the  Fed- 
eral reserve  act  has  provided  an  opportunity  to  our  people  of  financ- 
ing our  foreign  trade.  It  has  economized  the  use  of  credit  and  capi- 
tal. It  has  increased  its  efficiency,  which  will  enable  us,  as  I  have 
said,  to  engage  in  financing  trade  movements  with  and  between  for- 
eign countries,  which  will  do  much  to  build  up  our  international  trade 
exchanges,  particularly  with  the  great  nations  whose  representatives 
are  here  assembled. 

This  leads  naturally  to  consideration  of  the  banking  system  which 
has  lately  been  organized  under  the  Federal  reserve  act.  In  order 
to  understand  the  changes  brought  about  by  the  new  banking  system 
we  must  briefly  consider  what  the  former  system  was,  its  defects,  and 
how  these  defects  have  been  remedied  in  the  new  system. 

Prior  to  November  16,  1914,  when  the  new  Federal  reserve  banks 
opened  their  doors,  we  had  approximately  7,500  banks  in  the  United 
States  chartered  by  the  National  Government,  and  having  the  sole 
right  to  issue  notes  known  as  national-bank  notes.  The  capital  and 
surplus  of  these  banks  was  a  little  under  2  billions  of  dollars,  and 
taken  in  connection  with  their  deposits  represented  a  banking  power 
of  over  9  billions  of  dollars.  There  were  also  over  20,000  State  banks, 
trust  companies,  and  savings  banks,  chartered  by  the  respective  States, 
representing  a  capital  and  surplus  of  a  little  over  2  billions  of  dollars, 


156  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

and  including  deposits,  representing  a  banking  power  of  over  14 
billions  of  dollars. 

These  banks,  both  National  and  State,  were  independent  and  iso- 
lated, except  as  to  a  limited  interdependence  of  some  State  institu- 
tions through  stock  ownership.  They  together  constituted  over  30,000 
individual  units,  between  which  in  times  of  financial  stress  effective 
cooperation  was  impossible. 

Leaving  out  of  consideration  for  the  moment  the  State  banks, 
there  were  in  the  United  States  over  7,500  independent  units  called 
national  banks,  each,  as  I  before  stated,  having  the  power  of  note 
issue  and  each  bound  to  keep  in  its  vaults  and  with  other  national 
banks  in  certain  cities,  called  reserve  cities,  a  reserve  fixed  by  law. 

Under  the  national-bank  act,  however,  these  reserves  were,  in  effect, 
sealed  up  and  could  not  lawfully  be  used,  even  in  times  of  financial 
stress.  A  bank  whose  lawful  reserve  was  below  the  legal  limit  was 
bound  to  restore  it,  and  if  it  was  not  restored  within  a  specified  time 
the  Comptroller  of  the  Currency  cou]d  place  a  receiver  in  the  bank. 

The  merchants  and  farmers  of  the  country  were  often  refused 
credit — the  very  essential  of  business  life — and  yet  they  could  see 
these  sealed-up  reserves,  ample  for  relief  purposes,  and  yet  denied 
them.  They  were  in  the  position  of  a  man  weakened  by  hunger 
looking  through  a  plate-glass  window  observing  every  kind  of  food 
which  he  is  told  is  for  his  benefit,  and  yet  no  morsel  of  which  can 
he  under  any  circumstances  be  permitted  to  eat. 

As  a  result,  in  times  of  financial  stringency,  each  bank  had  to  pro- 
tect itself  regardless  of  the  condition  of  other  banks,  and  had  to 
fortify  itself  against  its  demand  obligations  by  piling  up  reserves 
far  above  the  prescribed  limit.  To  do  this  it  had  to  call  loans  or 
refuse  to  renew  or  make  new  loans  during  the  stringency.  The 
necessary  result  of  this  procedure  was  to  make  the  stringency  even 
more  severe,  and  the  hoarding  of  its  resources  by  the  individual 
banks  quickly  led  to  hoarding  by  individuals,  thus  throwing  the 
whole  banking  system  into  confusion  and  ruining  thousands  of  mer- 
chants who  were  unable  to  obtain  the  assistance  to  which  under 
ordinary  circumstances  they  would  have  been  clearly  entitled. 

During  the  latter  part  of  the  panic  of  1907  it  was  found  that 
some  banks  which  by  law  need  carry  only  15  per  cent  reserves  ware 
actually  carrying  reserves  of  between  40  and  50  per  cent  of  their 
deposits,  while  in  1914  the  reserves  of  some  banks  amounted  to  70 
per  cent.  It  is  also  a  most  significant  fact  that  at  the  height  of  that 
panic  over  200  millions  of  dollars  in  cash  were  being  carried  by  the 
banks,  in  their  vaults  and  with  their  reserve  agents,  in  excess  of 
their  legal  requirements.  If  these  200  millions  of  resources  could 
have  been  used  for  the  common  benefit,  such  a  panic  would  not  have 
taken  place. 


PROCEEDINGS.  157 

Under  our  old  system  the  banks  of  the  United  States  were  in  the 
position  of  an  army  entering  into  action  as  a  disorganized  body  of 
individuals,  without  a  single  officer  and  without  a  single  company, 
battalion,  regiment,  or  brigade.  That  our  oft-recurring  panics  under 
the  old  system  did  not  involve  more  of  our  banks  and  their  customers 
in  general  ruin  is  one  of  the  wonders  of  financial  science  and  is  a 
great  tribute  to  the  marvelous  recuperative  powers  and  unrivaled 
resources  of  our  people. 

Under  our  old  financial  system — or,  rather,  lack  of  system — every 
dollar  loaned  by  a  bank  on  commercial  paper  was  a  dead  investment, 
as  if  buried  in  the  ground,  until  the  day  of  maturity.  The  paper, 
when  discounted,  was  lowered  into  the  vaults  of  the  bank  with  almost 
funereal  ceremony ;  in  fact,  the  national  banks  were  but  mausoleums 
for  dead  commercial  paper,  and  if  a  bank  president  with  ghoulish 
propensities  were  to  open  the  vaults  and  try  to  dispose  of  any  of 
the  paper  stored  there,  before  its  resurrection  on  the  day  of  ma- 
turity, the  act  would  have  been  looked  upon  with  suspicion.  As  a 
result,  when  a  bank  had  made  all  the  loans  it  could  its  power  to  aid 
its  customers  absolutely  ceased,  and  many  a  merchant  of  high  stand- 
ing and  good  credit  had  to  be  refused  further  assistance,  to  his 
injury  and  possible  disaster. 

Every  bank  had  to  arrange  so  that  some  of  its  resources  should  be 
invested  in  so-called  liquid  assets,  so  that  in  times  of  financial  stress 
they  could  instantly  realize  upon  these  assets.  As  a  result  funds 
which  otherwise  might  have  been  loaned  to  farmers  and  merchants 
were  sent  to  the  large  financial  centers  of  the  country  to  be  there 
invested  in  call  loans  upon  stock  exchange  collateral — that  is  to  say, 
upon  bonds,  stocks,  and  other  securities  which  represented  no  com- 
mercial transactions,  but  which,  in  many  cases,  simply  represented 
speculative  activities.  When,  however,  in  times  of  stress  these  loans 
had  to  be  called  it  was  often  found  that  what  was  considered  to  be  a 
most  liquid  asset  was,  for  the  time  being,  no  asset  at  all — as  witness 
the  period  in  the  summer  of  1914,  when  these  so-called  liquid  assets 
were  absolutely  debarred  from  sale  by  the  closing  of  the  stock 
exchanges. 

Furthermore,  under  the  old  system  the  national  banks  issued  so- 
called  national-bank  notes,  which  were  originally  designed  to  con- 
stitute an  elastic  currency,  rising  and  falling  in  response  to  the  de- 
mands of  agriculture  and  commerce.  Unfortunately,  however,  these 
notes  had  no  such  elasticity  as  was  thus  ascribed  to  them,  because  of 
the  fact  that  their  issue  was  not  controlled  by  or  based  upon  business 
development;  on  the  contrary,  these  notes  were  indissolubly  chained 
to  Government  bonds,  which  had  to  be  pledged  with  the  Government 
as  collateral.  These  Government  bonds  were  neither  issued  nor  regu- 
lated by  the  expansion  or  contraction  of  trade  and  commerce.  They 


158  PAN  AMERICAN  FINANCIAL  CONFERENCE 

were  fixed  in  amount  and  fluctuated  in  value  in  no  fixed  ratio  to  the 
development  of  those  branches  of  business.  As  a  fact,  it  was  the  fluc- 
tuation in  value  of  these  bonds  which  influenced  the  expansion  or 
contraction  of  the  national-bank  notes  rather  than  an  expansion 
or  contraction  in  business.  When  business  slackened  and  contrac- 
tion of  these  notes  was  desirable,  the  notes  responded  but  feebly,  and 
in  some  cases  actually  increased  in  amount ;  while,  on  the  other  hand, 
when  expansion  was  desirable  to  accommodate  increasing  trade,  the 
notes  at  times  actually  decreased;  and  at  other  times  when  they 
responded  to  the  need  for  expansion  the  response  was  so  belated  as 
to  take  effect  only  when  the  necessity  for  the  expansion  had  ceased. 

This  alliance  of  national-bank  notes  with  Government  bonds  was  a 
strange  one.  The  national-bank  notes,  supposed  to  be  a  measure  of 
the  development  and  expansion  of  trade,  were  linked  to  and  gov- 
erned by  the  fluctuation  in  value  of  these  bonds,  which  represented 
war,  the  destruction  of  trade,  and  the  past  dire  necessities  of  the 
Government.  Thus  these  national-bank  notes,  intended  to  represent 
the  progress  and  development  of  trade  and  commerce  of  the  twentieth 
century,  were  linked  to  the  evidences  of  destruction  of  trade  and 
commerce  of  the  nineteenth  century.  There  may  have  been  a  reason 
for  this  strange  alliance  in  the  nineteenth  century  owing  to  the  neces- 
sity for  finding  a  market  for  Government  bonds,  but  in  this  twentieth 
century  there  is  certainly  no  good  reason  for  its  continuance. 

Furthermore,  under  the  old  system  the  national  banks  were  not 
able  to  finance  our  foreign  trade,  because  under  the  law  they  could 
not  lend  their  credit  in  the  form  of  acceptances.  As  a  result  our 
foreign  trade  had  to  be  financed  in  London  and  on  the  Continent, 
and  the  expression  now  so  frequently  heard — dollar  acceptances — 
was  merely  an  ideal  as  far  removed  from  practical  realization  as  the 
moon  is  distant  from  the  earth. 

For  example,  we  buy  large  quantities  of  raw  and  manufactured 
silk  from  the  Orient.  This  silk  goes  direct  to  the  Pacific  ports  of 
our  country;  it  is  taken  overland  by  special  train.  The  bill  of  ex- 
change, however,  drawn  for  the  selling  price,  is  drawn  upon  a  foreign 
bank  and  is  sent,  together  with  the  bill  of  lading  and  other  documents, 
east  to  London,  or  it  may  even  pass  through  the  United  States  on  its 
way  to  the  foreign  bank  upon  which  it  is  drawn,  later  to  be  returned 
to  the  United  States  for  final  discharge  of  the  obligation  of  the  pur- 
chasers in  this  country. 

The  lack  of  cooperative  union  or  confederation  between  the  indi- 
vidual banks  and  their  reserves  also  weakened  the  ability  of  the 
banks  to  conserve  the  supply  of  gold,  the  standard  of  value  in  the 
United  States,  and  as  a  result  the  movement  of  the  precious  metals 
from  the  country,  even  when  in  strict  accordance  with  the  laws  of 
trade  and  of  ultimate  advantage  to  the  United  States,  was  looked 


PKOCEEDINGS.  159 

upon  with  anxiety  as  a  symptom  of  financial  trouble,  causing  uncer- 
tainty and  lack  of  confidence. 

I  have  tried  to  show  some  of  the  defects  which  existed  under  our 
former  system — the  lack  of  cooperation  between  the  individual  banks, 
the  lack  of  any  system  by  which  the  reserves  could  be  either  used  by 
the  individual  banks  or  consolidated  into  a  common  fund  for  the 
benefit  of  all  the  banks,  the  impossibility  of  rediscounting  com- 
mercial paper  once  discounted  by  the  banks,  its  lack  of  liquidity, 
and  the  consequent  necessity  for  investment  of  part  of  the  bank's 
assets  in  call  loans  as  the  most  liquid  investment  possible,  the  lack 
of  a  genuine  elastic  currency,  and,  finally,  the  lack  of  power  to 
finance  our  foreign  trade  through  the  loaning  of  credit  by  means  of 
acceptances. 

The  question  naturally  arises  just  how  the  Federal  reserve  act  has 
remedied  these  conditions,  placing  the  United  States  upon  a  firm 
banking  foundation.  I  shall  try  to  answer  this  question  briefly. 

It  should  be  clearly  understood  that  the  Federal  reserve  act  does 
not  add  a  dollar  of  money  to  existing  stocks  held  by  the  banks  or  by 
the  people,  and  also  that,  while  it  gives  the  national  banks  some 
valuable  new  powers  and  privileges,  it  does  not  change  their  inher- 
ent structure  or  their  present  charters. 

Just  what,  then,  has  the  Federal  reserve  act  accomplished  ?  While 
the  act  is  a  long  one,  containing  much  minute  detail,  its  underlying 
principles  are  simplicity  itself. 

In  the  first  place,  it  divides  the  United  States  into  12  districts,  each 
district  containing  approximately  from  500  to  700  national  banks. 
The  national  banks  in  each  district  unite  in  forming  a  new  bank 
called  the  Federal  reserve  bank,  to  which  each  national  bank  contrib- 
utes 6  per  cent  of  its  paid-up  capital  stock  and  surplus  to  provide  the 
necessary  capital. 

The  individual  capital  of  these  12  Federal  reserve  banks  varies,  re- 
spectively, from  a  little  under  5  millions  to  a  little  over  20  millions  of 
dollars.  The  total  capital  of  the  12  banks  (not  counting  State  insti- 
tutions which  may  ultimately  become  members)  is  a  little  over  100 
millions  of  dollars. 

At  the  present  time  only  one-half  of  the  capital  payments  have 
been  called,  and  the  total  paid  in  by  all  the  national  banks  amounts 
to  a  little  over  50  millions  of  dollars. 

[We  thus  have  12  Federal  reserve  banks  with  a  total  capital  of  over 
50  millions  of  dollars  paid  in  and  about  as  much  more  subject  to  call 
by  the  Federal  Reserve  Board  when  and  if  needed.  This  capital, 
under  the  terms  of  the  Federal  reserve  act,  has  been  paid  in  gold  or 
gold  certificates. 

The  12  Federal  reserve  districts  vary  greatly  in  area  and  in  popula- 
tion. For  example,  the  Federal  reserve  district  of  Chicago  has  a 


160  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

population  of  over  12  millions  of  people,  exceeding  the  combined 
populations  of  Norway,  Sweden,  and  Switzerland. 

On  the  other  hand,  the  area  of  the  Federal  reserve  district  of  San 
Francisco  (683,852  square  miles)  is  so  extensive  that  you  could  place 
within  it  England,  Scotland,  and  Ireland,  the  whole  of  continental 
France,  Italy,  and  Germany  and  still  have  left  an  area  exceeding  that 
of  all  the  New  England  States  combined,  excepting  only  the  State 
of  Maine. 

In  addition  to  the  capital  payments  I  have  before  mentioned,  each 
national  member  bank  is  obliged  to  pay  to  its  Federal  reserve  bank  a 
certain  portion  of  its  legal  reserve,  which  portion,  however,  it  still 
counts  as  part  of  its  reserve.  These  payments  of  reserves  are  spread 
over  a  period  of  three  years,  and  the  total  payments  will  amount  to 
over  one-third  of  the  total  reserves  held  by  the  national  member 
banks. 

Up  to  the  present  time  about  295  millions  of  reserve  money  has 
been  thus  paid  to  the  12  Federal  reserve  banks,  and  at  the  end  of 
three  years  over  400  millions  will  have  been  paid  in,  which  latter 
amount  will  be,  of  course,  greatly  increased  by  the  admission  of 
State  banks  and  trust  companies.  At  that  time  all  the  reserves  of  the 
member  banks  must  be  held  in  their  vaults  or  with  the  Federal  re- 
serve bank,  the  privilege  of  keeping  their  reserves  in  part  in  approved 
banks  in  reserve  cities  ceasing  at  the  end  of  that  period.  This  will 
necessarily  largely  increase  the  amount  of  money  deposited  by  the 
member  banks  in  the  Federal  reserve  banks. 

In  addition  the  Secretary  of  the  Treasury  may  deposit  the  gen- 
eral funds  of  the  Treasury — excepting  only  certain  trust  funds — 
with  the  Federal  reserve  banks,  and  disbursements  of  the  Government 
may  be  made  by  checks  drawn  against  such  deposits. 

The  national  banks  in  the  12  respective  districts  (and  State 
banks  which  may  join  the  system  later)  are  the  only  stockholders 
of  the  Federal  reserve  banks,  and  their  stock  can  not  be  transferred 
or  hypothecated.  The  stock  is  entitled  to  a  6  per  cent  annual  cumu- 
lative dividend,  and  one-half  the  net  earnings  of  the  Federal  reserve 
banks  may  be  paid  into  a  surplus  fund  until  it  amounts  to  40  per 
cent  of  the  paid-up  capital  stock. 

All  net  earnings  over  and  above  this  dividend  and  surplus  are 
paid  to  the  United  States  as  a  franchise  tax. 

Each  Federal  reserve  bank  is  managed  by  a  board  of  directors, 
consisting  of  nine  members,  of  which  three  are  appointed  by  the  Fed- 
eral Reserve  Board  and  six  are  elected  by  the  member  banks,  three  of 
the  six  directors  representing  the  banks  and  three  consisting  of  mem- 
bers who  at  the  time  of  their  election  were  actively  engaged  in  com- 
merce, agriculture,  or  some  other  industrial  pursuit. 


PROCEEDINGS.  161 

These  twelve  Federal  reserve  banks  are  under  the  control  and 
direction  of  the  Federal  Reserve  Board,  consisting  of  the  Secretary 
of  the  Treasury  and  the  Comptroller  of  the  Currency,  ex  officio,  and 
of  five  other  members  appointed  by  the  President  and  confirmed  by 
the  Senate. 

The  Federal  Reserve  Board  sits  in  Washington,  D.  C.  It  appoints, 
as  I  before  said,  three  directors  on  the  board  of  each  Federal  reserve 
bank;  it  has  general  powers  of  supervision  and  examination  of  the 
Federal  reserve  banks  and  the  member  banks;  it  may  suspend  or 
remove,  for  cause,  any  director  or  officer  of  the  Federal  reserve  banks ; 
it  may  suspend  the  operation  of  any  Federal  reserve  bank  and  liq- 
uidate or  reorganize  such  bank;  it  defines  the  paper  which  may  be 
rediscounted  by  Federal  reserve  banks;  it  has  power  to  review  and 
determine  the  rates  of  discount  established  from  time  to  time  by 
the  Federal  reserve  banks  for  the  discount  of  commercial  paper 
offered  by  the  member  banks;  it  regulates  the  open-market  powers 
of  the  Federal  reserve  banks;  it  has  power  to  suspend  every  reserve 
requirement  of  the  act  if  it  deems  such  course  necessary ;  and  it  has 
many  other  specific  powers  which  I  need  not  mention  here. 

Each  Federal  reserve  bank  is  independent  of  every  other.  They 
are  empowered,  however,  with  the  permission  of  the  Federal  Reserve 
Board,  and  at  rates  fixed  by  the  board,  to  rediscount  the  discounted 
paper  of  any  of  the  other  Federal  reserve  banks,  and  can  be  required 
to  do  so  by  the  affirmative  vote  of  at  least  five  members  of  the  Fed- 
eral Reserve  Board. 

The  act  also  creates  a  body  known  as  the  Federal  Advisory  Coun- 
cil, one  member  of  which  is  elected  by  each  Federal  reserve  bank. 
The  duties  of  the  council  are  to  confer  with  the  Federal  Reserve 
Board  and  to  advise  it  as  to  matters  connected  with  discount  rates, 
note  issues,  reserve  conditions,  open-market  powers,  and  similar 
questions. 

I  have  thus  given  a  skeleton  outline  of  the  Federal  reserve  system. 
Many  details  I  have  had  to  omit  for  fear  this  address  would  take  on 
the  quality  and  length  of  a  treatise  or  textbook.  I  think,  however, 
that  what  I  have  outlined  will  give  a  fair  understanding  of  the 
scope  of  the  system. 

The  question  remains  as  to  how  the  Federal  reserve  act  remedies 
the  defects  which  I  have  outlined  as  characteristic  of  the  old  system. 

The  first  fundamental  defect  of  the  old  system  pointed  out  by  me 
was  that  each  national  bank  was  independent,  and  that  as  a  result 
we  had  7,500  independent  banks  and  7,500  scattered  reserves,  no 
effective  cooperation  being  possible,  nor  could  the  individual  reserves 
even  be  drawn  upon  legally  by  the  very  banks  which  owned  them. 

98257°— 15 11 


162  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

This  defect  is  remedied  under  the  Federal  reserve  act  through  the 
capital  and  reserve  deposits  placed  by  each  member  bank  with  its 
reserve  bank.  These  payments  constitute  a  substantial  fund — already 
about  350  millions  of  dollars,  and  constantly  growing — which  must 
be  used  by  the  Federal  reserve  banks  for  the  benefit  of  the  member 
banks  and  their  customers — the  people  of  the  United  States. 

These  funds  are  held  for  use  in  discounting  commercial  paper 
offered  by  the  banks  for  discounting  acceptances  and  for  certain  open 
market  investments  which  I  shall  not  undertake  to  enumerate  to-day. 
Any  bank  desiring  funds  can  take  its  commercial  paper  to  the  Fed- 
eral reserve  bank  and  obtain  gold  or  lawful  money  in  exchange. 
This  privilege  enables  a  bank  to  loan  freely  in  times  of  commercial 
stress  and  to  draw  down  its  available  resources  far  below  what  would 
have  been  considered  prudent  under  the  old  system,  for  the  commer- 
cial paper  discounted  by  the  banks  under  the  new  system  is  as  good 
as  gold,  as  it  can  be  turned  into  cash  or  a  cash  credit  at  once  at  the 
Federal  reserve  bank  upon  request.  This  privilege  also  makes  com- 
mercial paper  a  genuinely  liquid  investment,  whereas  under  the  old 
system  such  investments  were  absolutely  dead  until  the  day  of  ma- 
turity. Such  commercial  paper  is  far  more  liquid  than  a  loan  upon 
investment  securities,  for  the  loan  upon  commercial  paper  pre- 
sumably liquidates  itself,  as  the  borrower  receives  from  the  con- 
summation of  the  commercial  transaction — to  assist  which  the  note 
was  originally  discounted — the  money  with  which  to  pay  it. 

It  should,  moreover,  be  pointed  out  that  every  dollar  paid  into  the 
Federal  reserve  banks  by  the  member  banks — including  all  deposits 
made  by  the  United  States  Government — is  impressed  with  a  trust, 
in  that  it  must  be  used  (excepting  as  to  certain  open-market  invest- 
ments) only  for  the  discount  of  paper  issued  or  drawn  for  agricul- 
tural, industrial,  or  commercial  purposes,  whether  in  the  domestic  or 
foreign  trade,  and  can  never  be  invested  in  or  loaned  upon  specula- 
tive securities  or  even  upon  real  estate  transactions. 

The  second  fundamental  defect  in  the  old  system  which  I  have 
pointed  out  was  the  lack  of  a  really  elastic  currency.  The  Federal 
reserve  act  remedies  this  defect  by  providing  for  the  gradual  pay- 
ment and  cancellation  of  the  national-bank  notes,  and,  further,  by 
giving  authority  to  the  Federal  Reserve  Board  to  issue  to  Federal 
reserve  banks  applying  therefor  obligations  of  the  United  States 
known  as  Federal  reserve  notes.  The  bank  obtaining  such  notes  must 
deposit  with  one  of  the  Government  directors,  known  as  the  Federal 
reserve  agent,  as  collateral  commercial  paper  approved  by  the  regu- 
lations of  the  Federal  Reserve  Board  up  to  the  face  value  of  the  notes 
thus  issued,  and  in  addition  must  maintain  a  gold  reserve  of  40  per 
cent  against  such  notes.  These  notes  will  constitute  a  truly  elastic  cur- 
rency, rising  and  falling  with  the  rising  and  falling  of  agriculture, 


PROCEEDINGS.  163 

trade,  and  commerce.  No  limit  is  imposed  upon  their  issue.  Such  a 
note  could  conceivably  be  issued  against  every  commercial  or  agricul- 
tural transaction  represented  by  commercial  paper  which  has  been 
discounted  by  member  banks.  When,  however,  the  commercial  paper 
liquidates  itself,  and  the  maker  uses  the  funds  received  from  the 
transaction  to  pay  off  the  note,  the  Federal  reserve  notes  issued 
against  that  paper  must  be  returned  and  canceled,  or  the  amount  of 
the  notes  thus  paid  must  be  retained  by  the  Federal  reserve  agent 
against  the  Federal  reserve  notes  until  they  are  returned  and  can- 
celed. 

The  Federal  reserve  notes  will  also  serve  to  protect  the  gold  supply 
of  the  United  States,  for  much  of  it,  sooner  or  later,  will  go  into  the 
vaults  of  the  Federal  reserve  banks  and  Federal  reserve  notes  will  be 
issued  in  its  place. 

The  Federal  reserve  act  also  authorizes  national  banks,  for  the  first 
time,  to  accept  bills  of  exchange  growing  out  of  the  import  and  ex- 
port trade  under  certain  reasonable  regulations,  and  the  Federal  re- 
serve banks  are  also  authorized  to  discount  such  acceptances.  This 
grant  of  power  is  a  most  valuable  one  and  will  enable  our  banks  to 
finance  our  foreign  trade  by  loaning  their  credit  upon  these  accept- 
ances. By  this  grant  of  power  the  so-called  "  dollar  acceptance  "  is 
made  for  the  first  time  possible,  and  this  means  much  for  the  future 
development  of  our  trade,  especially  with  the  great  nations  of  Cen- 
tral and  South  America,  and  will  add  much  to  our  ability  to  assist 
them  in  financing  their  sales  to  and  purchases  from  the  United  States. 

The  Federal  reserve  act,  however,  has  done  much  more  to  help 
make  possible  closer  trade  relations  with  foreign  countries.  The 
Federal  Eeserve  Board  is  given  power  to  permit  national  banks  to 
establish  branches  in  foreign  countries,  and  it  is  at  once  apparent 
what  a  great  assistance  this  will  be,  not  only  to  the  United  States 
but  likewise  to  the  great  nations  who  are  trading  with  the  United 
States,  especially  those  whose  delegates  are  assembled  here.  Branches 
of  national  banks  have  already  been  authorized  in  Argentina,  Brazil, 
Panama,  and  other  countries,  and  it  is  confidently  expected  that  a 
great  development  in  our  trade  relations  with  such  countries  will 
result.  [Applause.] 

The  Federal  Eeserve  Board  is  also  authorized  to  permit  the  Federal 
reserve  banks  to  open  and  maintain  banking  accounts,  appoint  corre- 
spondents, and  establish  agencies  in  foreign  countries,  for  the  purpose 
of  purchasing  and  selling  bills  of  exchange  arising  out  of  commercial 
transactions ;  these  banks  are  also  authorized  to  deal  in  gold  coin  and 
bullion  at  home  and  abroad.  It  is  easy  to  see  what  power  the  Federal 
Reserve  Board,  through  the  Federal  reserve  banks,  will  thereby  have, 
in  connection  with  its  power  over  discount  rates,  over  the  movement 
of  the  precious  metals  into  and  from  the  United  States,  . 


164  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

These  great  powers  can  and  will  be  exercised  in  such  a  manner  as 
to  encourage  and  assist  in  every  way  the  growth  of  the  volume  of 
trade  between  the  United  States  and  foreign  countries. 

I  think  it  will  be  realized,  as  I  have  before  stated,  that,  growing 
out  of  this  new  banking  act,  the  time  has  come  for  a  marvelous  de- 
velopment in  our  foreign  trade,  especially  with  South  America,  and 
that  an  opportunity  is  given  to  finance  that  trade  such  as  has  never 
been  possible  before.  [Applause.] 

The  resources  of  the  Federal  reserve  system  will  also  be  greatly 
augmented  in  the  future  by  the  addition  of  large  resources  con- 
tributed by  State  banks  and  trust  companies,  which  the  act  permits 
to  join  the  Federal  reserve  system  under  reasonable  regulations.  I 
venture  to  express  the  hope  that  within  the  near  future  the  majority 
of  the  strong  State  banks  and  trust  companies  doing  a  commercial 
business  will  join  this  system. 

The  Federal  reserve  act  economizes  the  use  of  capital ;  it  makes  its 
use  more  effective  than  under  the  old  system;  by  lowering  the  pre- 
scribed reserve  requirements  it  has  released  hundreds  of  millions  of 
capital  which  will  provide  additional  credit;  by  its  rediscount  pro- 
visions and  by  the  powers  given  to  the  Federal  Reserve  Board  to 
suspend  reserve  requirements  in  cases  of  necessity  it  has  practically 
made  a  financial  panic  of  the  type  we  went  through  in  1907  an 
impossibility. 

The  banks  have  been  greatly  strengthened  by  these  reforms  and 
have  enlarged  their  power  to  grant  discounts  to  their  customers  both 
in  domestic  and  international  trade. 

I  believe  the  result  will  be  of  lasting  advantage  and  benefit,  not 
only  to  the  people  of  the  United  States  but  to  the  people  of  all 
nations  which  engage  in  trade  with  us. 

I  have  tried  briefly  to  outline  just  what  the  Federal  reserve  act  has 
done  for  us,  and  to  show  how,  incidentally,  it  may  be  of  great  advan- 
tage to  all  nations  that  trade  with  us.  There  remains  only  to  con- 
sider the  practical  application  of  the  principles  of  the  act  to  the 
great  problems  of  commerce,  transportation,  and  finance  which  you 
are  called  together  to  consider,  and  these  problems  will  be  considered 
by  you  in  conjunction  with  our  own  delegates,  who  are,  it  is  needless 
to  add,  chosen  men,  representing  the  highest  ability  in  practical 
banking,  and  who  represent  as  well  the  highest  type  of  our 
citizenship. 

I  am  sure  that  it  will  be  the  earnest  prayer  of  all  the  people  of 
our  country,  and  of  the  great  nations  whose  delegates  are  here 
p.ssembled,  that  our  deliberations  shall  be  crowned  with  successful 
achievement.  [Prolonged  applause.] 


PROCEEDINGS.  165 

Secretary  McAooo.  Gentlemen,  I  have  now  the  honor  of  introduc- 
ing the  Honorable  Paul  M.  Warburg,  another  member  of  the  Federal 
Reserve  Board,  who  will  speak  on  the  future  financial  course  of 
American  nations.  [Applause.] 

ADDRESS  OF  HON.  PAUL  M.  WARBURG. 

Mr.  CHAIRMAN  AND  GENTLEMEN  : 

It  is  a  great  honor  to  be  permitted  to  speak  before  a  conference  in- 
cluding the  eminent  leaders  of  government,  finance,  and  business  of 
an  entire  continent.  It  must  be  confessed,  however,  that  to  address 
so  distinguished  an  audience  upon  a  topic  as  difficult  as  the  future 
financial  course  of  the  nations  of  America  is  a  task  to  be  undertaken 
only  with  great  diffidence  and  hesitation. 

We  meet  here  deeply  impressed  by  the  unparalleled  struggle  which 
involves  all  the  leading  European  nations  and  conscious  of  the  fact 
that  we  are  witnessing  the  beginning  of  one  of  the  most  important 
transformations  in  the  world's  history. 

We  can  not  at  this  time  forecast  whether  the  outcome  of  this 
struggle  will  be  a  drastic  revision  of  the  world's  map  or  whether 
national  lines  will  remain  substantially  unchanged.  But  we  already 
know  that  the  economic  consequences  of  this  unhappy  strife  will  be 
far-reaching  and  will  vitally  affect  the  future  economic  development 
of  our  own  hemisphere. 

The  object  of  this  address  is  to  attempt  to  crystallize  some  thoughts 
that  must  have  come  to  us  all  who  have  stood  in  awe  and  amazement 
watching  the  sudden  outburst  and  rapid  spread  of  this  disastrous 
conflagration  across  the  Atlantic. 

Before  presenting  these  thoughts  to  you,  on  behalf  of  the  Federal 
Reserve  Board  I  beg  to  express  the  great  satisfaction  that  my  col- 
leagues and  I  feel  at  being  afforded  this  opportunity  of  deliberating 
with  you  the  problem  confronting  us  all  at  this  momentous  turn  in 
our  history. 

WHENCE  AND  WHITHER  ? 
THE  FUTURE  FINANCIAL  COURSE  OF  AMERICAN   NATIONS. 

In  August,  1914,  six  European  powers  went  to  war.  The  anoma- 
lous consequence  of  this  event  was  that  all  American  nations  were 
thrown  into  a  condition  of  acute  financial  and  commercial  disturb- 
ance. 

Would  it  have  been  possible  to  avoid  so  disastrous  an  effect  upon 
nations  not  directly  involved  in  this  struggle  and  thousands  of  miles 
removed  from  the  fields  of  battle  ?  And,  furthermore,  by  what  means 
may  we  hope  to  prevent,  in  the  future,  the  recurrence  of  such  fatal 
conditions  ? 


166  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

These  questions  are  deserving  of  the  most  serious  consideration  by 
this  Conference.  The  problem  affects  us  all.  We  have  all,  whether  in 
the  northern,  central,  or  southern  division  of  the  Western  Hemi- 
sphere, suffered  together.  It  is  of  the  most  vital  importance  that,  if 
at  all  possible,  a  proper  remedy  be  found. 

Our  sufferings  originated  in  disturbances  of  three  kinds — of  ship- 
ping, of  trade,  and  of  credit. 

These  three  phases  of  our  economic  life  are  so  closely  interrelated 
that  a  breakdown  of  one  immediately  affects  the  other.  A  collapse 
of  credit  must  interrupt  trade  and  therefore  shipping.  On  the  other 
hand,  disruption  of  shipping  and  trade  necessarily  disorganizes 
credit,  crippling,  as  it  does,  the  banking  machinery  which  rests  on 
the  fulfillment  of  contracts,  remittances,  and  payments  based  on  com- 
mercial transactions. 

When  in  the  face  of  untoward  events  actual  experience  affords  a 
definite  standard  by  which  to  judge  cause  and  effect,  it  seems  easy 
and  often  gratuitous  for  the  critic  to  state  what  steps  should  have 
been  taken.  Retrospect  is  easier  than  forecast !  Still,  it  is  only  by 
such  analysis  that  we  may  hope  to  avoid  similar  mistakes  in  the 
future. 

Reviewing,  then,  last  summer's  events  upon  these  assumptions,  we 
may  say  that  disruption  of  shipping,  trade,  and  credit  in  the  coun- 
tries of  this  hemisphere  might  have  been  less  disastrous  if,  instead  of 
relying  exclusively  upon  Europe  for  their  shipping  and  credit  facili- 
ties, the  American  nations  had  begun  in  time  to  develop  and  organize 
their  own  large  resources. 

It  is  not  within  the  purview  of  this  address  to  elaborate  the  most 
interesting  and  important  question,  What  American  nations  might 
have  done  in  the  past  or  what  they  should  do  in  the  future  in  order 
to  secure  their  own  transportation  facilities  independent  of  those  of 
others.  Confining  ourselves  to  the  subject  of  credit  and  banking,  we 
may  say  with  confidence  that  had  the  United  States  enacted  and  put 
into  operation  three  years  ago  its  Federal  reserve  system,  not  only 
could  our  country  have  weathered  the  storm  without  such  far-reach- 
ing disturbances,  but  we  should  have  been  in  position  to  save  our 
American  sister  republics  much  loss  and  inconvenience. 

In  order  to  make  this  point  clear  it  may  be  profitable  to  summarize 
briefly  last  year's  events  as  now  a  chapter  of  the  world's  financial  his- 
tory. When  the  war  began  England  occupied  a  most  advantageous 
strategic  financial  position.  She  had  been  acting  as  the  banker  of  the 
entire  world,  particularly  by  her  system  of  acceptance  credits,  thus 
financing  a  vast  majority  of  transactions  involving  the  importation 
and  exportation  of  goods  between  nations.  The  Hindoo,  the  China- 
man, the  Japanese,  the  Australian,  the  African  from  Cape  Colony 
to  Egypt,  the  Canadian,  the  South  American,  the  citizen  of  the 


PROCEEDINGS.  167 

United  States,  and  those  of  a  large  number  of  the  European  States, 
all  had  used  the  English  credit  market. 

But  when  the  war  broke  out  all  countries  were  suddenly  called 
upon  to  pay  their  debts  and  to  finance  their  trade  from  that  time 
forward  wherever  they  could  do  it  to  their  best  advantage.  The 
consequence  of  this  situation  was  that  England  found  herself  in  the 
position  of  a  creditor  calling  upon  the  entire  world  for  the  payment 
of  debts  due  at  a  time  when  shipping  and  trade  were  disorganized. 
It  was  therefore  impossible  within  the  short  time  granted  for  such 
payment  to  liquidate  obligations  by  the  shipment  of  merchandise, 
even  though  it  had  been  previously  sold  under  contract.  At  the 
same  time  a  British  debt  to  foreign  countries  was  shielded  by  a 
moratorium,  so  that  the  foreigner  who  happened  to  be  in  debt  to 
England,  yet  unable  to  collect  there  any  sums  due  him,  found  him- 
self able  to  settle  his  own  debts  to  that  country  only  by  buying  ster- 
ling remittances  at  most  exorbitant  prices  or  by  shipping  actual 
gold.  British  stock  exchanges  had  been  closed,  and  even  those  for- 
eign debtors  who  owned  British  securities  or  securities  which  nor- 
mally found  a  market  in  England  by  the  sale  of  which,  therefore, 
they  might  have  created  balances  with  which  to  pay  their  debts, 
saw  themselves  debarred  from  using  these  assets  for  the  liquidation 
of  their  obligations. 

Every  country  was  thrown  into  confusion.  Not  one  remained 
sufficiently  undisturbed  to  be  able  to  help  the  others. 

An  English  writer,  now  officially  connected  with  the  British  ex- 
chequer, has  written  a  very  able  and  interesting  book  wherein  he 
sums  up  the  condition  then  created,  as  follows : 

London  was  so  strong  that  it  did  not  know  how  strong  it  was.  Consequently, 
being  a  little  flustered  by  the  suddenness  of  the  outbreak  of  the  war,  on  a  scale 
that  mankind  had  never  seen  before,  it  made  the  mistake  of  asking  its  debtors 
to  repay  it,  not  the  thousands  of  millions  that  it  had  lent  in  the  form  of  perma- 
nent investment,  but  the  comparatively  trifling  amount — perhaps  one  hundred 
and  fifty  or  two  hundred  millions  (pounds  sterling) — that  it  had  lent  in  the 
shape  of  bills  of  exchange  drawn  on  it,  and  other  forms  of  short  credits. 
Thereby  it  put  the  rest  of  the  economically  civilized  world,  for  the  time  being, 
into  the  bankruptcy  court,  and  so,  finding  that  none  of  its  debtors  could  pay,  it 
thought  itself  obliged  to  ask  for  time  from  its  own  creditors  at  home.1 

It  is  not  for  us  to  criticize  England  for  having  acted  in  the  prem- 
ises from  a  merely  selfish  point  of  view.  This  may  well  have  been  her 
duty.  Her  vital  interests  were  at  stake,  and  in  view  of  the  great 
catastrophe  which  she  had  to  face  it  was  necessary  that  she  should 
muster  from  all  parts  of  the  world,  not  only  her  military,  but  also  her 
financial  reserves.  Nor  is  much  to  be  gained  by  insisting,  with  the 
British  authority  already  cited,  that  some  of  the  drastic  measures 

1  Hartley  Withers,  "  War  and  Lombard  Street." 


168  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

which  England  found  it  necessary  to  take,  and  even  her  moratorium, 
might  have  been  avoided  if,  immediately  upon  the  beginning  of  the 
disturbance,  she  had  been  adequately  prepared  to  issue  without  hesi- 
tation an  ample  supply  of  emergency  currency. 

We  must  not  blame  England ;  we  must  blame  ourselves  for  having 
carelessly  placed  ourselves  in  this  economically  dangerous  position. 

Without  venturing  to  analyze  the  problems  of  other  countries,  we 
may  say  with  reference  to  the  United  States  that  the  responsibility 
for  having  been  caught  tied  hand  and  foot  when  the  crash  came  is  in 
two  respects  our  own.  As  already  stated,  we  should  several  years  ago 
have  reorganized  our  financial  system  so  as  to  keep  our  gold  under  our 
own  effective  control  and  so  as  to  enable  us  to  finance  with  our  own 
resources  our  import  and  export  transactions.  We  should,  further- 
more, have  avoided  borrowing  abroad  when  we  could  have  financed 
our  requirements  at  home,  even  though  foreign  aid  was  had  at  a 
slight  advantage  in  rate.  [Applause.] 

The  chief  lesson  which  all  American  nations  will  have  to  learn 
from  last  year's  experience  is  that  it  is  unwise  for  the  world  to 
place  its  financial  dependence  upon  any  single  nation ;  and  that  those 
who  can  afford  to  do  so,  as,  for  instance,  the  United  States,  should  from 
this  time  on  adopt  a  policy  of  greater  reliance  upon  their  own  re- 
sources. Those  countries  which  can  not  rely  exclusively  upon  their 
own  resources  should  adopt  a  policy  of  dividing  the  risks  of  financial 
dependence  as  evenly  and  widely  as  they  possibly  can. 

Financial  dependence  expresses  itself  in  two  ways:  First,  in  the 
short-term  credit  granted  to  individuals;  and,  second,  in  the  long- 
term  and  corporate  credit,  particularly  that  granted  to  Governments. 

Dealing  first  with  the  problem  of  individual  credits,  the  United 
States  may  be  profoundly  grateful  that  just  at  this  time  its  new 
banking  system  has  been  established.  The  day  of  the  opening  of 
our  Federal  reserve  banks  will  mark  the  advent  of  our  financial 
independence.  We  are  now  able  to  finance  our  own  imports  and 
exports  by  the  use  of  American  acceptances.  More  than  that,  we  are 
in  a  position  to  finance  the  trade  of  other  nations  and  to  play,  in  this 
respect,  the  part  of  an  international  banker  that  has  heretofore  been 
played  almost  exclusively  by  England.  While  it  is  true  that  Ger- 
many and  France,  during  the  past  generation,  have  begun  to  finance 
a  large  portion  of  their  own  trade  by  acceptances  of  their  own  banks, 
the  bulk  of  the  business  has  heretofore  been  handled  by  England. 
There  is  no  doubt  that,  upon  the  establishment  of  peace,  there  will 
be  a  tendency  on  the  part  of  many  nations  to  emancipate  themselves 
in  this  respect,  and  we  may  add,  with  profound  conviction,  that  it  is 
precisely  in  this  field  that  the  United  States  will  be  destined  to  play 
a  most  important  role. 


PROCEEDINGS.  169 

We  realize,  of  course,  that  it  will  be  an  arduous  task  to  procure 
for  our  American  acceptances  the  same  standing  in  world  markets  as 
is  now  enjoyed  by  those  of  nations  that  have  been  in  the  field  for 
generations  past.  Their  commercial  and  financial  relations  are  well 
established  and  bankers  in  foreign  countries  are  more  familiar  with 
the  names  of  European  than  of  American  acceptors.  Moreover,  the 
avenues  that  lead  toward  European  establishments  for  the  sale  or 
discount  of  acceptances  are  clearly  mapped  out  and  at  present  of 
readier  access  than  the  new  paths  leading  to  those  of  the  United 
States.  It  is  difficult  to  change  well-established  banking  habits. 
We  are  well  aware,  therefore,  of  the  fact  that  it  will  be  necessary  fey 
this  country  to  render  the  utmost  possible  assistance  in  order  to 
facilitate  a  development  so  eminently  desirable  for  the  future  pro- 
tection of  these  large  continents.  This  can  be  done  in  several  ways : 

First,  by  the  readiness  of  our  banks  and  bankers  to  enter  this  new 
field  in  a  spirit  of  liberality  and  patriotism.  They  must  be  thor- 
oughly imbued  with  the  thought  that  it  is  necessary  for  the  financial 
independence  of  their  country  and  for  the  security  of  our  American 
sister  Republics  that  import  and  export  transactions  touching  this 
country  should  in  the  future  be  financed  by  ourselves.  [Applause.] 

It  may  be  opportune  to  point  out  in  this  connection  that  the  Fed- 
eral reserve  act  gives  ample  powers  for  the  development  of  this  busi- 
ness even  though  these  powers  may  have  to  be  still  further  enlarged. 
Member  banks  may  accept  and  Federal  reserve  banks  may  dis- 
count bills  arising  out  of  transactions  based  upon  the  "  importation 
or  exportation"  of  goods.  The  Federal  Reserve  Board  has  been 
advised  by  its  counsel  that  the  words  "importation"  and  "exporta- 
tion," as  used  in  this  connection,  need  not  be  construed  as  confining 
these  transactions  to  importations  or  exportations  into  or  from  the 
United  States,  but  that  these  transactions  may  also  cover  shipments 
between  foreign  countries.  We  shall  be  in  position,  therefore,  to 
serve  as  bankers  for  our  American  sister  Republics,  not  only  in  their 
trade  with  us,  but  even  in  their  trade  with  others. 

In  order  to  develop  this  new  avenue  of  American  banking  we  need 
not  even  draw  upon  the  means  heretofore  employed  for  the  financing 
of  our  own  problems.  The  United  States  has  a  gold  stock  amounting 
to  the  phenomenal  sum  of  about  $1,890,000,000,  of  which  so  far  only 
$300,000,000  in  round  figures  have  been  concentrated  in  the  Federal 
reserve  banks.  The  Federal  reserve  banks  need  only  continue  the 
process  just  begun  of  substituting  Federal  reserve  notes  for  the  gold 
and  gold  certificates  now  in  circulation,  in  order  to  gain  control  of  a 
vast  additional  financial  power  which  now  lies  idle.  We  may  confi- 
dently expect,  therefore,  to  find  ample  means  to  handle  this  business 
by  the  simple  process  of  perfecting  our  organization  and  assembling 
our  idle  gold. 


170  PAtf  AMERICAN  FINANCIAL 

But  in  order  to  compete  successfully  in  foreign  markets  we  must 
have  not  only  banks  and  bankers  of  undoubted  standing,  able  and 
willing  to  undertake  these  acceptance  transactions,  but  also  discount 
rates  that  compare  favorably  with  those  of  competing  nations. 

The  fact  that,  within  a  few  months,  our  banks  have  been  able  to 
accept  in  the  aggregate  an  amount  reported  to  be  in  excess  of  $120,- 
000,000  permits  the  conclusion  that  we  have  begun  on  a  proper  basis 
and  with  success.  But  the  test  will  come  when  peace  shall  have  been 
restored  and  when  we  shall  have  to  make  special  efforts  to  maintain 
and  strengthen  our  position.  It  will  then  be  one  of  the  functions 
of  the  Federal  reserve  banks  to  assist  in  the  establishment  of  dis- 
count rates  for  these  acceptances  low  enough  to  render  them  effective 
in  securing  business. 

There  is  one  other  signal  service  that  Federal  reserve  banks  can 
render  in  this  respect ;  that  is,  to  facilitate  the  quotation  of  so-called 
"  forward  discount  rates."  A  bank  in  a  foreign  country,  when  buy- 
ing a  dollar  acceptance,  must  be  assured  of  the  rate  at  which  the  bill 
will  be  discounted  when  it  reaches  our  country.  On  this  rate  it  will 
largely  depend  whether  the  foreign  shipper  will  use  his  European  or 
his  American  credit  facilities.  The  Federal  reserve  banks  are  fully 
alive  to  the  importance  of  this  question,  and  I  may  state  on  behalf 
of  some  of  the  largest  of  these  banks  that  they  will  be  prepared  to 
give  the  greatest  possible  assistance  by  adopting  a  liberal  policy  in 
quoting  such  forward  discount  rates,  good  for  a  certain  date  or  for 
delivery  upon  the  arrival  of  mail  by  a  given  steamer. 

The  Federal  Reserve  Board  and  the  Federal  reserve  banks  have 
not  yet  reached  any  conclusions  as  to  the  most  efficient  method  of 
fixing  and  transmitting  these  rates;  whether  they  should  be  an- 
nounced locally  only  at  the  office  of  a  Federal  reserve  bank  or 
whether  it  would  be  helpful  to  cable  them  to  the  main  banking  cen- 
ters in  foreign  countries.  It  is  hoped  that  both  our  guests  and  our 
bankers  will  consider  the  matter  and  give  us  the  benefit  of  their 
suggestions. 

The  Federal  reserve  act,  for  the  first  time  since  the  establishment 
of  our  national  banking  system,  enabled  national  banks  to  open 
branches  in  foreign  countries.  Important  branches  have  already 
been  opened  and  others  are  soon  to  follow.  It  is  hoped  that  the  law 
may  be  amended  in  the  near  future  so  as  to  still  further  facilitate 
the  establishment  of  such  branches.  It  is  generally  felt  that  these 
direct  connections  with  foreign  countries  will  tend  toward  the  de- 
velopment of  better  knowledge  and  understanding  of  local  conditions 
and  problems  and  the  greater  intimacy  necessary  for  the  develop- 
ment of  cordial  and  mutually  satisfactory  business  relations. 

The  vast  powers  of  the  Federal  reserve  banks  will  enable  them  to 
play  a  most  important  part>  and  they  will  do  all  they  can  to  assist 


PROCEEDINGS.  171 

in  facilitating  the  growth  of  a  truly  American  banking  system  rami- 
fying throughout  our  entire  hemisphere. 

The  policy  thus  outlined  as  applicable  to  individual  transactions 
should  also  apply  to  corporate  and  Government  financing.  It  is  a 
source  of  weakness  when  a  nation  depends  too  largely  on  one  single  or 
several  closely  interrelated,  foreign  markets,  no  matter  how  attractive 
may  be  the  terms  upon  which  its  obligations  may  be  placed  there. 
Fcr,  as  experience  has  shown,  such  securities  can  be  thrown  back 
upon  their  makers  at  a  time  when  it  is  least  convenient.  If,  during  a 
critical  period,  one  single  market  or  group  of  markets  becomes  un- 
available, while  obligations  of  a  debtor  country  mature  or  require- 
ments must  imperatively  be  met,  the  debtor  country  finds  itself  in  a 
most  precarious  condition. 

It  is  true  that  one  country  can  not  prevent  another  from  buying 
its  securities,  nor  would  it  be  advisable  hermetically  to  seal  one  stock 
exchange  against  securities  quoted  on  another  for  fear  that  a  closing 
of  the  one  might  otherwise  force  the  closing  of  the  other.  The  ad- 
vantage of  free  international  interchange  is  such  in  peace  that  we 
must  be  willing  to  bear  the  disadvantages  resulting  therefrom  in 
time  of  war.  But  every  country,  in  order  to  be  safe,  must  be  pre- 
pared for  such  an  eventuality.  The  financial  structure  of  a  country 
consists  of  three  main  parts — funded  long-term  securities  and  the 
organization  for  marketing  them,  viz,  the  stock  exchange;  indi- 
vidual short-term  credits  and  the  organization  for  marketing  them, 
viz,  the  discount  market  and  the  deposit  banks;  and,  finally,  the  note- 
issuing  reserve  banks.  Every  country  must  be  prepared  in  grave 
emergencies  to  see  the  first  of  these  three  organs  crippled  and  the 
stock  exchange  closed,  but  there  must  be  such  provision  that  the  busi- 
ness of  the  country  shall  in  that  case  be  carried  on  by  the  other  two 
units.  In  that  respect  last  August  found  us  still  unprepared.  The 
fact  that  our  stock-exchange  loans  became  unavailable  crippled  us. 
Our  Federal  Reserve  System  has  since  been  opened,  our  organization 
is  now  established,  and  any  future  catastrophe  will  find  us  well 
equipped. 

There  is  no  doubt,  however,  of  the  vulnerability  of  any  country  if 
too  large  a  volume  of  its  securities  be  held  in  one  other  country. 
It  is  certain  that  the  United  States  will  be  in  a  safer  condition  if,  in 
the  future,  when  placing  the  securities  to  be  issued  for  the  develop- 
ment of  our  own  properties,  we  rely  to  a  larger  extent  than  in  the 
past  upon  our  own  markets.  It  is  important  to  state  this  principle 
emphatically,  even  though  for  the  next  few  years  to  come  it  be  not 
likely  that  Europe  could  act  as  a  large  purchaser  of  our  securities 
owing  to  the  stupendous  amount  of  bonds  issued  by  the  various  Euro- 
pean Governments,  the  extraordinary  inflation  of  currency  existing 
in  almost  every  part  of  Europe,  and  the  appalling  loss  of  property 


172  PAN  AMERICAN   FINANCIAL  CONFERENCE. 

suffered  by  those  countries.  Indeed,  it  may  well  be  expected  that  from 
now  on  the  United  States  will  not  only  have  to  rely  largely  upon  its 
own  resources  for  its  internal  development  kmt  that  we  shall  be 
called  upon  to  provide  means  for  absorbing  the  securities  previously 
placed  in  Europe  but  now  returning  to  us.  It  is  impossible  to  predict 
how  far  the  death  struggle  now  going  on  in  Europe  must  proceed 
before  an  end  is  reached,  and  we  can  not,  therefore,  form  any  esti- 
mate of  the  extent  of  the  destruction  of  property  and  prosperity. 
But  even  at  this  juncture  it  inust  be  apparent  to  every  student  of  the 
problem  that  borrowing  nations  will  have  to  husband  their  resources 
and  move  slowly  in  the  further  development  of  their  capacities  until 
the  power  of  some  of  these  warring  nations  to  save  shall  have  recu- 
perated and  European  money  shall  again  freely  seek  opportunities 
for  investment  abroad.  Upon  the  degree  to  which  destruction  con- 
tinues will  depend  the  role  we  eventually  shall  have  to  play,  not  only 
with  respect  to  our  own  affairs  but  with  respect  to  those  of  others. 
No  doubt  there  will  be  a  strong  desire  on  the  part  of  other  countries, 
and  particularly  of  the  American  nations,  to  ask  of  the  bankers  of 
the  United  States  governmental  and  corporate  credits.  Some  large 
foreign  loans,  aggregating  more  than  $200,000,000,  have  been  recently 
placed  as  a  beginning.  Our  country  will  be  prepared  to  render 
very  substantial  service  in  this  respect.  But  we  must  bear  in  mind 
that  in  order  to  create  a  broad  market  for  bonds  of  foreign  nations 
it  is  not  sufficient  that  our  bankers  alone  be  familiar  with  these 
countries.  It  is  necessary  that  the  investor,  from  his  own  knowledge, 
have  confidence  and  a  sympathetic  understanding  concerning  the 
borrowing  country's  conditions.  In  other  words,  in  order  to  open  a 
wide  market  for  foreign  securities  there  must  be  intimate  business 
relations  with  the  countries  which  offer  such  securities  for  invest- 
ment. The  belief  is  often  expressed  that  foreign  loans  create  for- 
eign business  relations.  This  is  true,  but  it  can  be  said  with  equal 
force  that  foreign  business  relations  are  conducive  to  the  conclusion 
of  foreign  loans.  We  may  state  with  confidence  that  the  United 
States  will  prove  a  strong  market,  growing  in  importance  from  year 
to  year,  for  the  loans  of  those  foreign  countries  with  which  we  enter- 
tain business  relations.  [Applause.] 

Europe  has  done  much  in  developing  the  northern,  the  central,  and 
the  southern  parts  of  this  hemisphere.  European  banks  and  bankers 
have  been  our  staunch  and  loyal"  friends  in  the  past.  It  would  be 
unbecoming  in  us,  and  disloyal  at  the  same  time,  were  we  to  forget 
this  or  to  attempt  to  profit  from  their  misfortunes.  But  our  own 
growth  and  development,  and  the  unhappy  fate  that  has  overcome 
Europe  have  combined  to  bring  us  to  a  momentous  turning  point  in 
our  economic  history.  Our  own  steadily  increasing  weight  and 


PROCEEDINGS.  173 

Europe's  relatively  weakened  condition  mean  that  the  New  World 
must  in  the  future  lean  less  heavily  on  the  Old. 

I  think  I  am  justified  in  saying  that  there  is  no  difference  of  con- 
servative opinion  that  the  United  States  does  not  aspire  now  to  take 
the  place  of  Europe's  leading  financial  powers.  Our  own  field  of 
operation  is  still  too  vast  to  enable  us  or  to  render  it  even  desirable  for 
us  to  become  the  entire  world's  banker  at  this  stage  of  our  own 
development.  But  the  safety  of  all  countries — and  we  include  Eng- 
land among  their  number — demands  that  if  again  the  latter  should 
find  herself  forced  to  call  upon  her  debtors  for  instant  payment, 
there  should  be  at  least  one  country  strong  and  independent  enough 
to  shoulder  a  substantial  portion  of  the  burden. 

The  development  of  all  American  nations  lies  in  the  same  direc- 
tion, though  there  will  be  a  difference  in  degree.  It  must  be  the 
aim  of  the  United  States  from  now  on  to  move  rapidly  toward  entire 
financial  independence.  It  must  be  the  aim  of  her  sister  republics 
so  to  divide  the  credits  needed  for  their  further  development  that  the 
temporary  breakdown  of  one  creditor  country  will  not  seriously 
embarrass  them.  They  will  enjoy  the  greatest  degree  of  safety  in 
this  respect  if  their  creditor  nations  are  geographically,  politically, 
and  economically  separated  from  one  another  as  far  as  possible.  So 
that  in  case  one  should  become  involved  the  other  may  be  expected 
to  remain  unaffected  thereby.  Though  in  normal  times  closely  con- 
nected with  Europe,  the  American  continents  ought  to  be  so  organ- 
ized as  to  form  a  distinct  and  independent  unit  in  times  of  emer- 
gency— a  union  whose  transportation  and  credit  systems  will  remain 
unbroken,  even  though  all  Europe  should  go  to  war. 

An  American  union  of  this  kind  will  prove  of  the  greatest  eco- 
nomic advantage  for  all  nations  concerned.  If  such  a  union  be 
thought  desirable,  it  must,  however,  be  forged  and  riveted  every  day 
of  the  year.  If  it  is  to  stand  the  test  of  time  and  stress,  it  must  be  a 
structure  of  gradual  growth,  carefully  planned  and  consistently 
developed,  and  built  upon  a  safe  foundation.  [Prolonged  applause.] 

Secretary  McADOo.  Gentlemen,  I  am  new  going  to  ask  the  Hon- 
orable Santiago  Perez  Triana  to  address  you. 

Dr.  SANTIAGO  PEREZ  TRIANA  (Colombia).  Gentlemen,  it  may  be 
thought  that  in  my  remarks  I  am  perhaps  going  beyond  the  limits 
of  the  subjects  prescribed  by  this  Conference.  I  bespeak  from  you 
your  forbearance  and  patience,  and  I  think  that  many  of  you  will 
agree  with  me  that  I  am  not  shooting  at  random,  but  that  there 
may  be  something — in  fact,  that  there  is  something — in  what  I  have 
to  say  that  is  of  fundamental  and  essential  importance  in  relation 
to  the  great  aims  of  this  Conference. 


174  PAN  AMERICAN   FINANCIAL   CONFERENCE. 

This  Conference  has  been  called  for  the  specific  purpose  of  im- 
proving financial  relations.  I  take  it  that  that  is  a  means — one  of 
the  many  means — to  a  great  end.  The  great  end,  taking  it  in  a  large 
way,  is  the  welfare  and  the  happiness  of  the  peoples  of  this  con- 
tinent. That  happiness  and  welfare  must  be  developed  on  the  lines, 
socially,  politically,  and  internationally,  that  have  thus  far  been 
followed.  We  have  achieved  great  success,  and  those  lines  are,  as  far 
as  human  vision  can  go,  the  true  ones  and  the  honest  ones;  there- 
fore, there  is  no  reason  why  they  should  be  changed.  Those  lines 
are  crystallized  in  the  words  of  seeking  freedom  through  democracy. 
Inasmuch  as  there  is  no  freedom  without  justice,  that  expresses  it 
all.  This  Conference,  therefore,  is  devoted  to  freedom  and  to  de- 
mocracy, and  every  great  effect  to  maintain  that  freedom,  like  this 
one,  for  the  improvement  of  financial  relationships  comes  under  that 
head. 

At  various  times  during  the  history  of  the  continent  since  the 
beginning  of  the  emancipation  it  has  been  found  necessary  to  place 
on  record  utterances  or  to  take  steps  tending  to  emphasize  the  fact 
that  the  continent  is  first  and  foremost  devoted  to  democracy,  and 
that  no  interference  from  outside,  in  any  shape  whatever,  can  or  will 
be  tolerated. 

That  has  created  a  status  or  a  condition  which  may  be  .defined  as 
the  inviolability  of  the  continent.  The  fact  of  that  inviolability  has 
been  strengthened  by  the  development  of  American  history ;  and  by 
American,  as  I  said  yesterday,  I  mean  the  totality  of  the  continent. 
That  fact  has  been  brought  into  glaring  vividness  by  the  present 
unhappy  events  that  are  taking  place  in  Europe.  The  inviolability 
of  the  continent  stands  like  a  wall  which  a  careful  owner  of  an 
orchard  would  build  around  it — a  wall  to  protect  his  property  from 
the  encroachments  of  a  wayward  torrent  in  his  neighborhood.  When 
the  torrent  swells,  it  would  seek  to  overflow,  as  torrents  will,  into 
the  protected  precincts,  where  it  would  find  the  protecting  wall  and 
would  be  diverted  onward  on  its  career.  In  this  wise  the  inviolabil- 
ity of  the  American  Continent  is  one  of  the  determining  factors  of 
the  present  European  war,  for  had  the  wall  not  existed  the  torrent 
would  have  been  able  to  overflow  and  flood  us. 

These  things  are  not  perhaps  generally  said  and  thought,  or  per- 
haps they  are  thought  and  not  said.  A  very  short  recapitulation  of 
European  history,  especially  .during  the  last  forty  or  fifty  years,  made 
in  no  spirit  of  criticism  particularly,  but  with  the  calmness  with 
which  one  looks  at  a  clock  and  finds  that  it  is  12  o'clock,  I  think  will 
prove  my  contention.  The  European  powers  constituted  themselves 
into  two  great  groups  within  the  last  twenty-five  years.  Those  two 
great  groups  prided  themselves  on  having  maintained  the  peace  of 
Europe  during  the  period  of  forty  years,  since  the  Franco-Prussian 


PROCEEDINGS.  175 

War,  and  in  a  measure  they  did.  The  soil  of  Europe  was  not  red- 
dened with  blood  during  that  period.  But  they  evolved  a  sort  of 
war  in  which  men  were  not  killed  outright  with  weapons,  but  they 
were  with  taxes  principally  for  the  burden  of  armaments.  The  in- 
crease of  rivalry  amongst  the  powers  made  an  escape  necessary  it 
was  found  in  conquest  of  foreign  lands.  The  groups  stood  as  joint 
conquerors.  Sometimes  they  conquered  jointly  and  sometimes  indi- 
vidually, but  the  fact  is  that  by  fire  and  sword  or  otherwise  the 
totality  of  the  lands  of  the  Eastern  Hemisphere  that  were  in  weak 
hands  were  conquered.  They  were  first  labeled,  then  parceled  and 
distributed  amongst  the  most-favored  members  of  the  two  conquering 
groups.  Their  labors  may  have  been  for  the  good  of  humanity,  or 
they  may  not  have  been.  It  is  not  for  me  to  say,  at  least  not  to  say 
here.  Of  course  such  things  are  always  adduced  as  being  for  the 
good  of  humanity,  for  the  higher  interests  of  civilization,  the  white 
man's  burden,  and  whatnot.  Like  many  other  common  men  I  would 
be  in  a  far  better  position  to  appreciate  those  claims  when  they  served 
to  carry  on  the  propaganda  of  conquest  by  sword  and  fire  and  blood, 
if  they  had  not  happened  to  coincide  every  time  with  pecuniary 
advantages  to  those  who  put  them  forth.  But  things  come. to  an  end, 
and  even  an  Eastern  Hemisphere,  as  large  as  it  was,  had  to  come  to 
an  end.  And  it  did  come  to  an  end.  There  was  nothing  more  to  be 
distributed.  Then  hands  were  potentially  stretched  out  and  eager 
eyes  were  cast  around  to  see  where  there  were  more  lands  to  conquer. 
Certainly  there  were  more  lands.  There  were  vast,  immense,  bound- 
less plains  and  mountains  and  rivers  and  valleys ;  all  was  there  bask- 
ing in  the  sunshine,  full  of  the  promises  of  wealth  and  empty  of 
humanity.  But,  alas,  that  mirage  disappeared  like  a  summer  cloud 
in  the  sky,  for  there  was  that  blessed  inviolability  that  prevented  such 
conquest. 

It  is  not  drawing  too  much  upon  the  imagination  to  suppose  such 
a  scene  as  this:  A  private,  a  very  private,  cabinet  council  at  one  of 
the  various  monarchies  in  the  presence  of  the  respective  monarch; 
the  prime  minister  laying  the  burdens  of  his  soul  and  of  his  nation 
before  his  august  majesty;  and  then  thus: 

Sire,  we  have  reached  the  extreme  limit  of  taxation  and  the  people  are 
almost  in  rebellion  in  our  midst.  We  are  running  on  to  irredeemable  poverty, 
and  the  surplus  of  our  population  is  going  to  other  and  happier  lands  where 
men  are  not  born  with  the  burden  of  debts  of  one  hundred  or  one  hundred 
and  fifty  years  ago  (for  all  the  European  nations  are  still  paying  for  the 
Napoleonic  wars,  amongst  others),  and  thus  men  who  go  abroad,  who  repre- 
sent brain  power  and  muscle  and  training,  go .  to  strengthen  the  political 
structure  of  our  rivals  of  to-day  and  our  enemies  of  to-morrow.  A  stop  must 
be  put  to  that.  What  is  the  remedy?  We  must  have  new  lands  and  we  must 
take  them,  conquer  them  where  they  are  to  be  found,  and  we  must  follow  the 
line  of  least  resistance.  ,We  can  not  take  them  from  the  hands  of  powerful, 


176  PAN  AMERICAN   FINANCIAL  CONFERENCE. 

crystallized  monarchies  like  ourselves,  but  we  can  and  must  take  the  lands  of 
the  continent  of  America,  which  are  only  protected  by  a  political  convention 
and  by  a  pretended  inviolability,  which  is  a  sin  in  the  eyes  of  God  and  man, 
because  the  lands  are  there  empty  and  desert  and  our  humanity  is  here,  and 
God  made  the  earth  for  men  to  work  it,  etc. 

Yesterday,  sire,  out  of  respect  for  that  present  convention,  we  were  foolish 
to  cut  our  throats  mutually;  that  is  to  say,  to  go  to  war  with  the  very  same 
nations  that  stand  in  identically  the  same  condition  that  we  do.  We  should 
have  united.  There  is  room  there  in  that  part  of  the  world  to  keep  us  going 
without  wars  amongst  ourselves  for  a  few  hundred  years. 

I  may  have  drawn  the  picture  in  rather  lively  colors,  but  the 
essence  of  it  is  absolutely  true.  Rivalries  amongst  the  nations  that 
would  thus  talk  have  hindered  and  may  hinder  in  the  future  any  such 
proceedings.  But  it  is  not  for  us  Americans  to  rely  on  those  rivalries 
when  we  see  how  they  have  been  put  aside  in  the  conquest  of  the 
Eastern  Hemisphere. 

That  brings  me  to  this  conclusion:  The  hour  of  watchfulness  has 
only  just  begun  for  us  now.  The  danger  that  I  allude  to  does  not 
lie  in  the  perversity  of  individual  men  or  in  the  perversity  of  col- 
lectivities ;  it  is  the  growth  of  circumstances — circumstances  that  are 
deeply  rooted  in  the  past  centuries— and  it  will  be  indispensable  for 
certain  systems  which  constitute,  as  I  might  call  them,  the  sediment  of 
history  in  Europe  to  be  eliminated  and  replaced  by  democracy  in  its 
fullest  meaning  before  those  circumstances  disappear.  And  they 
will  not  disappear  easily.  They  will  die  hard  and  die  fighting. 
Therefore  we  Americans  must  be  prepared  to  make  the  inviolability 
of  our  continent  stronger  each  day.  [Applause.] 

We  have  seen  by  this  war  what  that  inviolability  means.  We  have 
seen  that  we  are  immune  from  many  evils,  but  that  we  can  open  our 
arms  and  our  hands  and  help  not  only  the  nations  of  this  continent 
but  the  nations  of  Europe,  thus  fulfilling  a  great  mission.  Those  are 
sacred  trusts  which  we  must  work  out  and  develop,  and  develop  to 
their  fullest  capacity. 

Now  let  us  turn  our  eyes  to  our  own  continent.  A  house  divided 
against  itself  soon  falls.  Ours  is  not  a  divided  house.  Yet,  with 
reason  or  without  reason,  even  amongst  the  members  of  a  cordial, 
loving  family,  there  may  exist  distrust.  There  are  small  darknesses 
in  corners  of  the  land.  They  may  disappear  or  they  may  develop. 
Let  us  see  that  our  harmony  in  this  continent  is  diaphanous,  trans- 
parent, and  clear,  without  one  shadow  of  doubt.  The  inviolability 
of  the  continent,  which  closed  the  era  of  conquest  to  outsiders,  has 
not  worked  absolutely.  I  am  not  here  to  recapitulate  or  blame — far 
be  it  from  me.  Wherever  redress  is  possible,  redress  should  be  accom- 
plished. Wherever  in  the  historic  development  of  the  nations  redress 
is  not  possible,  we  have  to  resign  ourselves  to  the  imperfections  of 


PROCEEDINGS.  177 

humanity  and  let  bygones  be  bygones  and  let  the  dead  past  bury  its 
dead.  [Applause.] 

Yet  there  is  a  shadow.  I  do  not  say  that  it  is  justified.  I  do 
not  say  that  it  is  unjustified.  I  am  not  analyzing  it  in  an  elaborate 
.way.  But  there  is  a  shadow  of  distrust,  which  here  is  darker  and 
there  is  hardly  perceptible.  Let  us  take  that  shadow  of  distrust 
away.  What  is  the  essence  of  the  like  of  a  nation  ?  Its  sovereignty. 
What  is  the  essence  of  sovereignty?  Its  integrity.  Let  the  nations 
of  this  continent,  all  of  them,  in  a  formal  and  solemn  manner,  echo- 
ing words  that  have  been  pronounced  in  the  history  of  this  country 
by  the  chief  of  the  executive  power  of  this  Nation  not  long  ago, 
make  it  manifest  that  none  of  them  covet  the  territory  of  the  others 
and  that  they  all  consider  that  every  man's  home  is  sacred  and 
every  man's  country  is  sacred,  and  that  the  borders  of  the  respective 
nations  shall  be  considered  as  sacred  and  never  be  conquered  by 
force  of  arms.  [Applause.] 

You  gentlemen  here  represent  the  continents  of  America.  I  speak 
to  you  like  a  man  who  has  thought  a  good  deal  on  this  subject.  I 
consider  myself  in  that  light,  and  excuse  this  mention  of  my  humble 
personality,  as  a  good  connecting  link  between  the  two  great  sections 
of  the  continent,  the  Latin  and  the  English  speaking.  I  came  to  this 
country  so  many  years  ago  that  I  do  not  like  to  tell  it.  I  have  seen 
its  institutions  grow.  I  learned  then,  in  my  youth,  the  words  of  the 
great  Americans  which  have  shone  in  history  with  a  great  light. 
I  love  my  continent  and  my  section  of  it,  and  I  love  the  poor 
of  this  continent  more  than  the  rich,  because  greater  work  lies  before 
them.  The  more  powerful  a  country  may  be  the  more  is  its  duty  to 
be  generous  and  to  decree  solemnly  that  no  other  nation's  territory 
shall  be  violated — that  will  tend  to  the  peace  of  the  continent.  And 
let  it  not  be  thought  that  I  am  referring  to  the  strongest  nation, 
for  the  microbe  of  imperialism  very  soon  invades  the  organs.  It  is 
something  very  peculiar  and  it  demonstrates  how  woefully  embryonic 
is  the  development  of  mankind.  Your  honest  man,  your  sincere  man, 
your  Christian  man  who  will  not  take  the  ear  of  corn  from  his  neigh- 
bor's field  single  handed,  from  the  moment  that  he  becomes  numerous 
and  acquires  a  collective  conscience,  not  only  takes  the  ear  of  corn 
but  the  field  and  the  life  of  the  neighbor  to  boot,  and  calls  it  con- 
quest; then  he  presents  himself  as  a  hero  of  patriotism  in  a  halo  of 
glory  for  the  admiration  of  future  generations.  [Applause.] 

From  the  highest  summit  of  executive  power  it  has  been  declared 
in  this  country  recently  that  it  should  be  honesty  and  not  convenience 
that  should  guide  the  policy  of  nations.  We  should  hold  that  prin- 
ciple aloft.  That  is  the  flag  of  right.  We  should  hold  that  aloft 
as  the  flag  of  this  continent,  so  that  to  the  supposititious  prime 
98257°— 15 12 


178  PAN  AMEKICAN  FINANCIAL  CONFERENCE. 

minister  of  the  predatory  monarchy  we  could  reply :  "  Those  lands, 
vast  and  rich  and  wonderfully  potential  for  the  welfare  of  humanity 
which  you  see  and  covet  and  demand  because  you  say  their  posses- 
sion by  us  is  a  sin  against  God  and  man,  are  not  in  that  position. 
They  are  open  to  you.  All  your  people  may  come  in  their  thousands, 
and  in  their  millions,  and  we  will  not  only  give  them  a  home,  but  we 
will  crown  them  with  the  right  of  citizenship ;  but  this  we  tell  you, 
you  must  come  as  peaceful  multitudes,  not  as  conquering  clans.  We 
have  no  place  for  your  flags."  [Applause.] 

That  is  the  message  which  I  have  to  deliver.  I  can  not  suggest 
the  means  now.  I  have  not  prepared  that.  I  do  not  know — I  can 
form  no  opinion — as  to  how  this  suggestion  might  be  received,  and 
I  have  been  in  fear  that  it  might  not  be  thought  proper,  but  I  have 
said  it.  I  bespeak  your  kindness,  and  I  hope  it  will  deserve  and 
receive  some  attention.  [Prolonged  applause.] 

Secretary  McADoo.  I  now  take  great  pleasure  in  calling  upon  Mr. 
A.  Barton  Hepburn,  of  New  York. 

Mr.  A.  BARTON  HEPBURN  (New  York) : 

MR.  SECRETARY  AND  GENTLEMEN. — This  is  a  great  preparation  for  a 
very  little  speech.  We  have  had  the  pleasure  of  meeting  many — in- 
deed, most — of  the  delegates  from  the  two  Americas  in  New  York  on 
their  way  here,  and  have  cultivated  their  acquaintance  very  en  joy  ably 
and  to  a  considerable  extent.  The  importance  of  those  men  and  the 
importance  of  the  occasion  and  the  work  of  this  Conference,  however, 
grows  upon  one  as  its  labors  unfold.  It  is  truly  a  crucial  time  in  the 
history  of  our  own  Government  and  in  the  history  of  the  world.  In 
the  United  States  any  conference  or  any  convention  given  its  head  will 
presently  find  itself,  as  the  expression  is,  and  the  mere  fact  that  the 
first  hour  of  the  session  this  morning  was  consumed  in  discussion  of  the 
subject  of  transportation  or  communication  between  our  respective 
countries  shows  where  the  great  interest  of  the  continents  lies  and 
where  it  centers.  That  truly  is  fundamental,  for  we  can  have  no 
financial  connection  or  commercial  connection  unless  we  have  some 
means  of  getting  at  each  other,  direct,  facile,  easy  of  accomplishment, 
to  be  done  in  commercial  competition  with  routes  of  transportation 
existing  between  other  countries.  As  long  as  we  send  our  ambas- 
sadors to  South  America  by  way  of  Europe,  as  long  as  our  commer- 
cial transactions  with  all  that  continent  to  the  south  of  us  are  con- 
summated through  the  bankers  of  Europe,  we  can  not  hope  to  make 
much  progress  or  to  achieve  very  great  success  in  reciprocal  com- 
merce with  those  countries.  In  fact,  in  our  United  States  we  have 
suffered  under  three  cardinal  embarrassments  in  cultivating  trade 
with  other  nations  in  the  past.  The  great  bulk  of  the  commercial 
banking  of  this  country  was  done  by  our  "  national  banks."  These 


PROCEEDINGS.  179 

were  forbidden  by  law  to  do  business  anywhere  except  over  the 
counter  at  the  place  named  in  their  charters.  They  could  not  have 
branches  or  agencies  either  in  this  country  or  abroad.  It  followed 
inevitably  that  all  the  foreign  trade  of  the  country  had  to  be  financed 
by  foreign  bankers,  by  the  bankers  of  the  nations  with  whom  we  are 
seeking  to  compete.  All  this  has  now  been  done  away  with.  The 
disadvantages  of  our  former  banking  system  as  well  as  the  advan- 
tages of  the  Federal  reserve  system,  now  so  happily  inaugurated, 
have  been  fully  and  fairly  and  most  clearly  set  forth  by  Gov. 
Hamlin  in  his  address  to  you  to-day.  We  stand  before  the  .world 
to-day  prepared  to  use  the  money  power,  the  banking  power  of  our 
own  country,  in  the  promotion  of  pur  own  interests,  in  trade  with 
other  countries  of  the  world — a  position  which  we  have  never  hereto- 
fore occupied. 

There  was  still  another  great  handicap.  During  the  years  of 
wooden  ships  our  forests  gave  this  country  a  great  advantage  in  ship- 
building, and  90  per  cent  of  all  our  foreign  commerce  was  carried 
under  the  American  flag  and  in  American  bottoms.  The  Civil  War 
interrupted  that,  it  is  true,  but  the  change  of  the  construction  of  ves- 
sels from  wood  to  iron  and  later  steel  made  the  greater  change,  and 
that  country  which  enjoyed  a  more  advanced  development  in  its  iron 
and  steel  products — England — naturally  absorbed  the  greater  portion 
of  the  shipbuilding  of  the  world.  Until  last  year  only  nine  per  cent 
of  our  foreign  commerce  was  carried  under  our  own  flag. 

Now,  what  does  this  mean?  It  means  that  in  competition  with 
England,  France,  Germany,  and  all  the  other  commercial  nations 
of  the  world  our  goods  had  to  be  transported  under  their  flags  and 
in  their  vessels  and  pay  the  rate  of  transportation  fixed  by  the  men 
with  whom  we  were  seeking  to  compete.  Until  the  last  session  of 
our  Congress  American  registry  was  absolutely  forbidden  to  foreign- 
built  vessels.  Prohibition  is  the  limit  of  protection,  and  from  the 
organization  of  the  country  until  recently  no  commercial  vessel  built 
in  a  foreign  land  could  be  registered  under  the  American  flag  and  do 
business  as  an  American  vessel.  Fortunately  the  rigors  of  that  law 
were  modified  by  the  last  Congress — very  much  modified.  And  yet 
they  have  not  gone  far  enough.  In  my  judgment,  in  order  to  facili- 
tate our  intercourse  with  other  nations  under  the  American  flag, 
Congress  must  go  still  further  in  liberalizing  the  laws  under  which 
vessels  may  be  manufactured  and  manned  in  this  country.  [Ap- 
plause.] As  the  law  now  stands,  if  we  were  to  establish  a  line  of 
vessels  between  this  country  and  Argentina  or  Chile,  it  would  be  more 
economical  and  more  to  the  advantage  of  the  stockholders  in  such 
corporation  to  have  that  company  incorporated  under  the  laws  of 
Argentina  or  the  laws  of  Chile  than  under  the  laws  of  the  United 
States.  [Applause.] 


180  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

But  this  present  Government  at  the  last  session  of  Congress  made 
many  material — we  might  almost  say  radical — changes  in  our  laws, 
and  modifications  in  the  right  direction  and  to  the  advantage  of  the 
country.  [Applause.]  They  made  a  tariff  law  which  had  a  tendency 
to  enlarge  international  communication.  They  have  given  us  a  very 
excellent  banking  law,  which  has  the  possibilities  of  working  out 
into  as  good  a  commercial  system  and  as  good  a  banking  system  and 
currency  system,  I  think,  as  any  other  nation  possesses.  I  do  not 
think  it  is  quite  perfect,  but  I  have  no  doubt  that  under  the  adminis- 
tration of  the  men  now  in  charge — and  I  want  to  say  I  do  not  think 
better  selections  could  have  been  made  throughout  the  country  for 
the  administration  of  this  law  (applause) — we  may  confidently  rely 
upon  the  result. 

Speaking  with  reference  to  the  Federal  Eeserve  Board  here  in 
Washington,  and  to  the  boards  of  the  twelve  different  reserve  banks 
throughout  the  country,  they  are  under  the  charge  of  good,  com- 
petent, earnest,  serious  men,  and  I  believe  that  we  are  going  to  have 
an  excellent  banking  credit  system,  and  that  is  what  we  have  not 
had  before.  [Applause.] 

There  is  one  other,  the  third  of  the  great  embarrassments  under 
which  we  have  labored  as  a  nation  in  competing  with  other  coun- 
tries, and  that  is  that  our  people  speak  only  one  language — English. 
We  are  so  far  away  from  other  nations  that  we  do  not  have  to  know 
their  languages,  and  we  do  not.  Since  our  relations  with  Porto 
Rico  and  Cuba  have  become  so  much  closer,  this  country  is  improving 
with  respect  to  Spanish.  But  in  competition  with  other  nations  in 
the  past  we  have  had  to  employ  representatives  of  those  nations  to 
conduct  our  business.  In  other  words,  in  order  to  expand  our  for- 
eign trade  we  have  been  obliged  to  call  upon  our  competitors  to 
finance  our  undertakings.  We  have  had  to  depend  upon  them  to 
transport  our  goods  in  competition  with  themselves  and  to  rely  upon 
these  rivals  to  make  our  trades  and  do  our  thinking  and  do  our  busi- 
ness for  us.  [Applause.]  Is  it  any  wonder  that  only  nine  per  cent  of 
our  commerce  last  year  went  under  our  own  flag  and  in  our  own 
bottoms? 

Well,  now,  gentlemen,  all  this  is  being  changed.  Our  colleges,  our 
universities,  throughout  the  country  and  in  our  large  cities,  and  our 
commercial  schools  are  making  a  special  effort  to  introduce  the 
mastery  of  French  and  German  and  Spanish — especially  Spanish — 
in  order  that  we  may  come  more  closely  and  more  intelligently  and 
more  successfully  into  contact  with  our  neighbors  to  the  south. 

There  is  one  further  suggestion  that  I  would  like  to  make,  and  that 
is  to  express  my  gratitude  for  the  privilege  of  sitting  here  and  listen- 
ing to  the  speech  of  the  gentleman  who  has  just  preceded  me.  [Ap- 
plause.] It  was  able  and  it  was  eloquent  throughout,  but  to  hear  a 


PROCEEDINGS.  181 

man  from  another  one  of  the  Americas  advancing  the  Monroe  doc- 
trine, amplified  and  enlarged  to  mean  America  for  Americans, 
applied  to  both  the  Northern  and  Southern  Americas,  is  very  delight- 
ful and  gratifying  indeed.  It  means  "  hands  off  "  to  the  rest  of  the 
world,  so  far  as  the  establishment  here  is  concerned  of  any  form  of 
government  which  would  be  a  disturbing  element.  It  means  more 
than  that.  It  means  the  getting  together  of  our  people  with  common 
sympathy  and  with  common  purpose.  We  want  nothing  of  you 
gentlemen  to  the  south  of  us  except  your  good  will  and  your  good 
society  and  your  cooperation  in  doing  the  business  of  the  world  which 
we  all  do  and  must  do  in  order  to  achieve  our  own  means  to  develop 
our  happiness,  comfort,  and  prosperity.  [Applause.] 

Mr.  Secretary,  we  owe  you  many  things,  but  chief  among  them  we 
wish  to  testify  our  appreciation  of  your  foresight  in  calling  this  Con- 
ference of  distinguished  gentlemen  at  the  present  time.  [Long  ap- 
plause.] 

Secretary  McADOO.  Gentlemen,  before  we  adjourn  there  is  one 
other  gentleman  whom  I  would  like  to  call  upon,  and  that  is  Mr. 
Mortimer  Schiff,  of  New  York.  I  would  like  him  to  talk  a  few 
moments  about  public  financing,  or  governmental  financing.  Mr. 
Schiff,  will  you  be  kind  enough  to  say  a  few  words  to  the  Conference 
upon  that  subject  ?  Before  Mr.  Schiff  begins  his  remarks  I  wish  to 
say  that  certain  of  the  delegates,  as  you  will  observe  by  reference  to 
the  program,  are  invited  to  luncheon  with  the  Secretary  of  State  at 
his  house  at  one  o'clock  today.  If  these  delegates  will  be  good  enough 
to  resort  to  the  Secretary's  house  upon  the  adjournment  here — Mr. 
Schiff  I  am  sure  is  not  going  to  detain  you  very  long — the  Secretary 
will  be  happy  to  receive  you. 

MR.  MORTIMER  L.  SCHIFF  (NEW  YORK)  : 

Mr.  CHAIRMAN  AND  GENTLEMEN. — Great  as  is  the  privilege  to  ad- 
dress a  gathering  such  as  this  and  to  participate  in  its  deliberations, 
I  have  hesitated  to  accept  the  invitation  of  our  distinguished  Sec- 
retary of  the  Treasury  to  be  one  of  the  speakers,  as  there  is  so 
little  of  specific  information  and  suggestion  which  I  can  contribute 
to  the  discussion.  I  welcome  the  opportunity,  however,  to  become 
better  acquainted  with  you  gentlemen  who  represent  our  great 
sister  Republics  of  the  American  Continent,  and  I  hope  that  as 
a  result  of  this  Conference  the  business  relations  between  our  respec- 
tive countries  may  be  greatly  increased  and  solidified.  I  leave  it 
to  others,  better  qualified  than  I  am,  to  propose  methods  and 
means  through  which  this  can  best  be  accomplished,  and  shall 
restrict  myself  more  particularly  to  describing  the  situation  as  it  now 
seems  to  exist.  Of  one  thing  I  can  assure  you,  and  that  is  that  the 


182  PAN  AMERICAN   FINANCIAL  CONFERENCE. 

interest  of  the  United  States  in  South  and  Central  America  is  steadily 
growing  and  that  our  manufacturers,  merchants,  and  bankers  gener- 
ally will  welcome  every  opportunity  to  extend  our  business  relations 
with  your  countries.  [Applause.] 

It  must,  however,  be  borne  in  mind  from  the  start  that  we  ourselves 
are  not  as  yet  under  normal  conditions  a  lending  nation.  We  still 
need  large  amounts  of  capital  for  our  own  purposes,  and  a  very  con- 
siderable portion  of  our  own  securities  are  still  held  abroad,  for 
which  we  must  be  prepared  eventually  to  make  payment,  either  by 
repurchasing  them,  or  by  meeting  them  when  they  mature.  In 
addition,  our  investing  public  is  still,  in  large  measure,  timid  about 
investing  money  in  foreign  countries  and  prefers  American  securities 
to  such  an  extent  as  at  times  to  make  the  difference  of  return  between 
foreign  and  domestic  securities  of  similar  quality,  offered  in  our 
market,  seem  almost  absurd.  The  banker  is,  of  course,  dependent  on 
his  clients,  the  ultimate  investors;  and  while  he  can  do  much  by  a 
proper  presentation  of  facts  to  educate  them,  in  the  final  instance  he 
is  forced  to  adopt  their  view  and  can  successfully  offer  and  place  only 
securities  which  meet  with  their  unqualified  approval. 

International  financing,  from  the  standpoint  of  the  banker,  may  be 
roughly  subdivided  into  three  classes  of  investments  or  advances  of 
credit : 

(1)  Government  loans,  including  those  to  States  and  municipali- 
ties; 

(2)  Obligations  and  shares  of  transportation,  industrial,  and  pub- 
lic service  corporations; 

(3)  Commercial  credits  and,  generally,  the  financing  of  purchases 
and  sales  of  goods  and  commodities. 

My  own  training  and  experience  have  been  primarily  along  the 
lines  of  government  and  corporation  finance,  and  I  shall,  therefore, 
discuss  rather  those  features  of  the  close  relationship  we  hope  to 
see  brought  about  between  the  Latin- American  countries  and  the 
United  States.  I  shall  not  attempt  to  go  into  any  detailed  descrip- 
tion of  the  manner  in  which  such  financing  should  be  done,  as  I 
assume  that  all  of  you  are  well  informed  as  to  this.  I  shall  only 
try  to  point  out  some  of  the  more  important  requisites  necessary  to 
make  your  securities  suitable  for  our  markets  and  in  that  connection 
call  to  your  attention  some  of  the  difficulties  with  which  bankers  and 
issuing  houses  have  to  contend  and  some  of  the  problems  which  they 
have  to  solve. 

Every  country  has  its  own  methods  of  doing  business,  and  our 
methods  in  the  United  States  differ  in  some  particulars  from  those 
to  which  you  may  have  been  accustomed  in  London,  Paris,  and 
Berlin.  In  several  important  particulars  our  method  of  distributing 
and  handling  securities  is  not  the  same  as  that  in  use  in  the  countries 


PROCEEDINGS.  183 

of  Europe,  and  this  must  be  borne  in  mind  in  determining  the  type 
of  security  to  be  offered  and  the  basis  on  which  it  is  to  be  placed. 
I  do  not  say  that  our  methods  are  better  than  those  of  Europe,  but 
they  are  different;  and,  as  a  result,  a  security,  which  under  normal 
conditions  might  find  a  ready  European  market,  might  be  very  diffi- 
cult to  deal  with  here. 

To  take  up,  first,  the  matter  of  government  finance,  it  is  very  im- 
portant that  the  investor  should  be  assured  that  the  borrowing  coun- 
try is  economically  administered;  that  in  its  annual  budget  income 
and  expenditures  balance;  and  that  the  proceeds  of  any  loan  wanted 
are  to  be  used  for  productive  purposes.  From  the  point  of  view  of 
the  investor,  dreadnaughts  and  rifles  are  not  good  security.  It  seems 
to  me  that  a  country  should  provide  out  of  its  own  budget,  through 
taxation  of  its  own  people  or  by  internal  loans  provided  by  them, 
for  all  that  might  be  called  its  nonproductive  expenditures,  and  that 
it  should  restrict  its  foreign  borrowing  to  such  purposes — public 
works,  railroads,  irrigation,  etc. — as  may  be  self-supporting.  In  this 
connection,  the  policy  recently  adopted  by  our  own  great  City  of  New 
York  may  be  of  interest.  On  September  19,  1914,  the  Board  of 
Estimate  and  Apportionment  of  the  City  of  New  York  passed  the 
following  resolution : 

"  Whereas,  the  members  of  this  board  have  contemplated  the  necessity  of  adopt- 
ing a  new  policy  with  regard  to  the  financing  of  permanent  public  improve- 
ments, looking  to  the  payment  of  the  expense  thereof  in  increasing  propor- 
tions out  of  the  budget  of  the  city  rather  than  through  the  issue  of  long-term 
bonds,  and  have  already  adopted  such  practice  in  part,  which  intent  was  fur- 
ther evidenced  by  the  statement  contained  in  the  communication  addressed 
by  the  Mayor  to  this  Board  in  transmittal  of  the  executive  budget  on  August 
the  14th  last ;  and 

Whereas  the  present  is  an  appropriate  time  for  the  further  extension  of  this 
policy :  now,  therefore,  be  it 
Resolved,  That  the  Board  of  Estimate  and  Apportionment  hereby  declares 

that  it  will  pursue  the  following  plan  in  financing  public  improvements : 

(1)  The  cost  of  all  improvements  of  the  revenue-producing  class,  such  as 
rapid  transit,  docks,  railway  and  water  terminals,  and  water  supply,  shall  be 
defrayed  by  the  issue  of  50-year  corporate  stock  as  heretofore. 

(2)  The  cost  of  all  permanent  improvements,  other  than  those  of  the  revenue- 
producing  class,   hereafter   authorized  by   this   Board,    shall   be   financed   as 
follows : 

(a)  Those  authorized  subsequent  to  the  passage  of  this  resolution 
and  during  the  year  1915  shall  be  paid  for,  three-quarters  by  the  issue 
of  15-year  corporate  stock.  The  corporate  stock  so  issued  shall  mature 
either  in  not  more  than  15  years,  amortized  as  provided  by  law,  or  in 
equal  annual  installments,  during  a  period  of  not  more  than  15  years. 
The  remaining  one-quarter  of  the  cost  of  such  improvements  shall  be 
paid  through  the  medium  of  a  one-year  bond  payable  from  the  next 
annual  tax  budget. 

(5)  Those  authorized  in  the  year  1916  shall  be  paid  for,  one-half  by 
the  issue  of  corporate  stock  maturing  as  aforesaid.  The  remaining 


184  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

one-half  of  the  cost  of  such  improvements  shall  be  paid  through  the 
medium  of  a  one-year  bond  payable  from  the  next  annual  tax  budget. 

(c)  Those  authorized  in  the  year  1917  shall  be  paid  for,  one-quarter 
by  the  issue  of  corporate  stock  as  aforesaid.    The  remaining  three- 
quarters  of  the  cost  of  such  improvements  shall  be  paid  through  the 
medium  of  a  one-year  bond  payable  from  the  next  annual  tax  budget. 

(d)  The  foregoing  statements  of  policy  contemplate  the  financing  of 
improvements  authorized  during  the  year  1918  and  subsequent  years 
through  the  inclusion  of  the  entire  cost  thereof  in  the  annual  budget 
of  the  city,  excepting  the  revenue-producing  improvements  hereinbefore 
mentioned. 

(3)  In  so  far  as  corporate  stock  notes  issued  by  the  City  of  New  York  as  a 
part  of  the  proposed  loan  of  $100,000,000  shall  be  retired  by  issues  of  corporate 
stock,  the  corporate  stock  so  issued  shall  mature  as  provided  in  clauses  (a), 
(6)  and  (c)  of  paragraph  2  of  these  resolutions. 

(4)  The  cost  of  public  works  already  authorized,  whether  under  contract  or 
not,  but  in  respect  of  which  new  bonds  are  to  be  issued,  is  to  be  financed  in 
the  same  manner  as  above  provided,  with  the  exception  of  the  cost  of  revenue- 
producing  improvements  hereinbefore  mentioned. 

Nothing  herein  contained  shall  be  deemed  to  affect  either  corporate  stock  or 
assessment  bonds  issued  to  replenish  the  street  improvement  fund  or  the 
fund  for  street  and  park  openings." 

I  have  quoted  these  resolutions,  which  were  adopted  by  the  muni- 
cipal authorities  of  New  York  City  at  the  height  of  the  stress  and 
strain  ensuing  upon  the  outbreak  of  the  European  war,  and  which 
even  under  those  trying  conditions  were  found  entirely  satisfactory 
by  bankers  and  investors,  not  as  embodying  a  hard-and-fast  plan  to 
be  followed  in  every  case,  but  as  illustrating  the  general  principles 
which  it  is  desirable  to  adopt  in  government  and  municipal  financing, 
in  order  that  investors  may  have  the  greatest  sense  of  confidence  in 
the  investments  of  this  kind  they  are  invited  to  take. 

I  would  venture  to  suggest  that  in  financing  productive  en- 
terprises in  foreign  countries,  the  most  acceptable  form  of  security 
is  a  bond,  having  a  direct  lien  upon  the  enterprise  itself  and  guaran- 
teed by  indorsement  by  the  government  rather  than  a  direct  gov- 
ernment obligation.  I  well  know  the  disinclination  on  the  part  of 
many  governments  to  pledge  specific  security,  but  I  firmly  believe 
that  by  doing  so  and  making  the  bonds  to  be  issued  primarily  the 
obligation  of  the  enterprise  for  whose  purposes  the  proceeds  are  to 
be  used  the  best  results  can  be  accomplished  and  the  best  market 
be  secured.  This  is,  of  course,  based  on  the  proposition  that  govern- 
ments should  be  administered  like  large  corporate  enterprises  in  a 
businesslike  manner,  and  that  public  works  are  undertaken,  not  for 
political  purposes,  but  because  they  are  needed  by  the  country  and 
will  yield  a  proper  return. 

Where,  however,  it  is  not  feasible  to  issue  such  a  guaranteed 
obligation  and  consequently  a  direct  obligation  of  a  government 
is,  for  one  reason  or  another,  the  type  of  bond  selected,  a  definite 


PKOCEEDINGS.  185 

pledge,  for  the  service  of  the  loan,  of  all  or  a  portion  of  some 
definite  form  of  governmental  revenue  will  always  prove  of  advan- 
tage. This  may  not  always  be  necessary,  but  with  countries  still 
in  course  of  development  and  dependent  on  foreign  financial  assist- 
ance, the  investor  seems  to  feel  that  he  has  the  right  to  expect  that 
some  definite  security  be  given.  While  at  the  start  it  may  be  neces- 
sary to  do  this  in  order  to  open  markets  and  inspire  confidence,  if  in 
the  course  of  time  the  record  of  the  borrower  justifies  it,  the  nor- 
mal course  of  development  may  permit  the  placing  of  loans  not  spe- 
cifically secured.  Our  public  has  never  taken  kindly  to  debentures 
or  other  unsecured  obligations  and  has  become  accustomed  to  mort- 
gage security.  If,  therefore,  it  is  desired  to  interest  the  American 
public  in  foreign  securities,  it  is  important  that  in  every  instance 
in  which  it  is  practicable  mortgage  security  should  be  given. 

From  this  it  follows  that  the  laws  in  the  foreign  countries,  in 
which  the  securities  are  domiciled,  must  be  such  as  to  give  full  pro- 
tection to  the  foreign  lender,  so  that,  in  case  of  need,  he  can  proceed 
without  difficulty  to  foreclose  upon  the  property  on  which  he  has  a 
lien.  Any  difficulties  in  the  laws  in  this  respect  will  militate  very 
much  against  the  possibility  of  placing  such  securities  in  the  United 
States.  Loans  to  be  placed  in  this  country  should  also,  if  possible, 
bear  a  definite  relation  to  trade  with  this  country,  and  the  proceeds 
should  be  used  for  such  purposes  as  will  best  further  this  trade. 
Our  investors  will  give  a  much  more  favorable  reception  to  a  loan, 
which  they  feel  stimulates  our  trade,  than  to  one  issued  for  purely 
internal  needs  of  the  borrowing  nation. 

Assuming  that  the  general  principles  just  stated  are  followed,  the 
exact  form  of  the  obligation  proposed  to  be  offered  to  investors  in 
this  country  is  a  matter  which  must  be  dealt  with  in  each  particular 
instance,  and  no  general  rule  can  be  laid  down  as  to  this,  since  it 
depends  almost  exclusively  upon  conditions  existing  at  the  time  of 
the  negotiation  of  the  loan.  At  certain  times,  a  short-term  note  is 
the  only  feasible  type ;  while,  at  others,  a  long-time  or  a  serial  bond 
can  be  sold  to  good  advantage.  As  a  general  proposition,  however, 
it  seems  to  me  that  short-term  securities  should  be  avoided,  if  it  is  at 
all  practicable,  even  though  by  doing  so  the  borrowing  Government 
is  obligated  to  what  may  seem  to  be  a  high  rate  of  interest  for  a 
longer  period  of  time.  If  financial  conditions  should  change  and 
money  be  procurable  at  materially  lower  rates,  advantage  can  be 
taken  of  the  redemption  provision,  which  should  be  embodied  in 
every  long-time  bond.  As  a  matter  of  fact,  however,  experience  has 
shown  that,  generally  speaking,  there  is  no  economy  in  short-time 
borrowing — to  say  nothing  of  the  danger  involved  for  the  borrower 
in  running  up  a  considerable  debt  with  an  early  maturity.  For  the 


186  PAN  AMERICAN   FINANCIAL  CONFERENCE. 

same  reason,  a  sinking  fund  should  also  be  provided,  if  in  any  way 
possible,  in  order  to  reduce  the  amount  which  must  eventually  be 
refinanced. 

It  is,  of  course,  of  the  greatest  importance  that  such  type  of 
security  be  selected  as  the  issuing  houses  can  unqualifiedly  endorse. 
On  the  other  hand,  the  issuing  houses  must  cooperate  with  the 
borrowing  nation  in  making  the  security  of  such  character  as  to 
render  it  certain  that  the  latter  can  surely  and  punctually  meet  the 
engagements  it  undertakes.  A  security,  even  if  successfully  issued, 
whose  terms  are  too  onerous  upon  the  borrower,  is  not  the  proper 
one  to  offer  to  our  public;  and  if,  as  a  result  of  such  onerous  terms, 
defaults  should  occur,  the  effect  may  be  disastrous  upon  further 
placing  of  loans  of  the  borrowing  country  in  question  and,  indeed, 
of  foreign  loans  in  general. 

I  am  sure  I  need  not  touch  upon  the  necessity  for  conforming 
strictly  to  the  customs  prevalent  here  as  to  the  preparation  of  bonds, 
by  which  I  mean  the  method  of  their  engraving  and  the  form  in 
which  they  are  drawn.  Certain  standards  in  respect  to  this  have 
become  very  firmly  established  and  it  is  important  that  they  should 
be  observed. 

There  is  one  other  matter  about  government  finance  to  which  I 
feel  some  delicacy  in  calling  attention,  but  of  which,  as  it  is  of  such 
great  importance,  I  shall  venture  to  speak,  hoping  that  I  may  not  be 
misunderstood  in  so  doing.  It  is  the  broad  question  of  the  stability 
and  permanency  of  the  government  of  the  borrowing  country.  Un- 
less that  is  assured  and  our  investing  public  feels  confident  that  it 
will  be  maintained,  it  is  hopeless  to  try  to  place' the  country's  securi- 
ties in  the  United  States. 

Small  loans  are  likewise  difficult  to  place,  as  the  investor  naturally 
dislikes  purchasing  a  security  forming  part  of  only  a  small  issue,  since, 
in  case  he  desires  to  realize  upon  his  investment,  ne  knows  he  will 
find  a  very  narrow  market,  if  one  at  all.  I  therefore  fear  that  for 
some  time  to  come  public  issues  of  foreign  securities  in  this  country 
must  be  restricted  to  the  larger  issues  of  the  more  important  coun- 
tries, although  from  time  to  time  smaller  amounts  may  possibly  be 
dealt  with  in  the  form  of  Treasury  bills  or  other  short-time  securities. 

One  of  the  greatest  difficulties  in  dealing  with  governments — and 
this  holds  true  of  every  government,  whether  in  South  or  Central 
America,  or  anywhere  else — is  the  difficulty  of  making  rapid  nego- 
tiations and  bringing  them  to  a  prompt  conclusion.  A  corporation 
is  usually  in  a  position  to  make  a  prompt  decision  and  thus  take  ad- 
vantage of  the  right  moment  to  finance  its  needs,  while,  on  the  other 
hand,  governments  are  usually  slow  to  reach  a  decision  and  nego- 
tiations drag  on.  The  result  is  that  it  often  occurs  that,  by  the  time 


PROCEEDINGS.  187 

the  negotiation  is  completed,  financial  conditions  have  totally  changed, 
and  a  business,  which  at  its  inception  seemed  feasible,  is  so  no  longer. 
It  would  facilitate  matters  very  much,  if  when  a  negotiation  for  an 
important  financial  transaction  is  about  to  be  undertaken,  a  pleni- 
potentiary could  be  empowered  to  deal  with  the  bankers  on  the  spot, 
rather  than  have  the  negotiations  conducted  by  cable.  According  to 
my  information,  the  Latin-American  nations  represented  by  you  have 
very  wisely  in  the  past  dealt  more  or  less  exclusively  with  certain 
definite  bankers  in  the  countries  where  their  obligations  have  been 
placed,  and  have  thus  maintained  a  continuity  of  financial  relations. 
It  is  very  important  for  the  maintenance  of  proper  credit  that  this 
should  be  so.  While  in  times  of  great  ease  of  money  and  of  large 
investment  demand  there  may  be  a  momentary  advantage  in  obtain- 
ing competitive  bidding,  the  practice  does  not  pay  in  the  long  run,  and 
experience  has  shown  that,  satisfactory  relations  having  been  estab- 
lished, the  best  results  are  achieved  by  continuing  them.  The  great 
majority  of  the  public  looks  to  the  issuing  houses  for  guidance  in  the 
matter  of  its  investments  and  expects  them  to  see  to  it  that  all  pos- 
sible safeguards  are  set  up  to  protect  the  investor.  No  issuing  house 
can  properly  perform  this  public  duty,  unless  it  has  the  unqualified 
confidence  of  the  borrower,  be  it  a  government  or  a  corporation ;  and 
this  mutual  confidence  can  be  secured  only  through  more  or  less  per- 
manent relations. 

With  regard  to  corporate  finance,  as  distinct  from  government 
finance,  the  same  tests  must  be  applied  in  judging  the  adaptability 
and  availability  of  the  securities  of  corporations  for  placing  in  this 
country,  as  if  they  had  to  do  with  the  domestic  enterprises  of  the 
United  States.  You  of  Latin  America  have,  however,  one  great  ad- 
vantage over  us,  and  that  is  your  system  of  definite  concessions  to 
private  business  enterprises  for  definite  periods  of  time.  Your  Gov- 
ernments have  thus  assumed  a  contractual  relationship  with  such 
business  enterprises,  by  wrhich  the  latter  have  been  assured  of  undis- 
turbed possession  of  the  rights  granted  them ;  and,  if  I  am  not  mis- 
taken, in  many  instances  and  particularly  in  railway  enterprises,  of 
minimum  rates  of  compensation  and  of  freedom  from  competition. 
Corporate  enterprises  of  this  character,  properly  established  and  suc- 
cessful in  their  activities,  should  in  time  find  in  this  country  a  mar- 
ket for  their  securities.  Enterprises  in  course  of  construction  are 
always  difficult  to  finance,  even  when  they  are  located  in  our  own 
country ;  and  this  would  of  course  be  even  more  true  of  those  located 
in  foreign  countries.  For  these,  government  aid  by  way  of  guaran- 
ties or  otherwise,  would  probably  be  necessary  in  order  to  make  their 
securities  marketable  here. 

In  conclusion  may  I  point  out  that  it  must  not  be  assumed  because 
a  number  of  foreign  loans  have  recently  been  placed  here,  that  this 


188  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

country  has  suddenly  become  a  world  market  for  securities  and  is  in 
a  position  wholly  to  replace  the  European  markets,  upon  which  you 
have  heretofore,  to  a  great  extent,  been  dependent.  It  is  true  that, 
owing  to  the  war  and  the  great — though  probably  temporary — abun- 
dance of  money,  we  have  for  the  time  being  become  the  only  open 
financial  market,  and  that,  as  a  result,  it  has  been  possible  to  place  some 
foreign  loans  here.  This  has  been,  however,  to  a  considerable  extent 
forced  placing,  and  the  investor  has  had  to  be  tempted  by  very  high 
rates  of  interest.  This  has  held  true  of  European,  as  well  as  of 
South  American  loans.  The  better  knowledge  of  the  entire  class  of 
foreign  securities  is,  however,  steadily  growing  in  the  United  States ; 
and  I  think  we  are  justified  in  the  expectation  that  in  time  we  can 
build  up  a  real  clientele  here  for  this  type  of  loans.  When  once  the 
investor  is  convinced  of  the  safety  of  many  forms  of  foreign  obliga- 
tions, it  should  become  feasible  to  place  such  loans  here  on  their  own 
merits  and  on  a  basis  comparable  to  that  upon  which  our  own  securi- 
ties of  similar  character  are  placed.  This  process  can  not  be  arti- 
ficially hastened;  but,  if  the  normal  development  is  allowed  to  take 
place,  without  too  much  pressure  being  brought  to  hurry  it  or  to 
foster  it  on  hastily  devised  and  artificial  lines,  we  may  look  forward 
with  confidence  to  a  sound  growth  of  our  investment  market  for  for- 
eign and  in  particular  for  South  American  securities. 

Too  much  stress,  however,  can  not  be  laid  upon  the  truth  that  the 
only  relationship  between  the  countries  of  Latin  America  and  the 
United  States  that  can  be  lasting  and  satisfactory,  is  one  which  is 
based  on  mutual  understanding  and  good  will;  and  that,  if  such  a 
relationship  is  once  firmly  established,  the  development  of  all  our 
financial  and  commercial  intercourse  is  bound  to  be  along  proper  and 
permanently  effective  lines.  On  the  other  hand,  just  as  the  credit  of 
a  number  of  our  own  enterprises  has  been  seriously  damaged  through 
mistakes  of  management,  with  a  resultant  effect  on  some  of  our  do- 
mestic securities,  so  will  irreparable  damage  be  done  to  the  possibil- 
ity of  financing  your  requirements  here,  if  great  care  be  not  taken  in 
respect  of  the  quality  of  the  securities  which  are  offered  to  American 
investors.  It  takes  years  of  time  and  every  manner  of  precaution  to 
establish  confidence ;  but  it  may  be  destroyed  in  a  moment. 

Investors  in  this  country  are  still  timid  as  to  foreign  investments 
and  have  not  yet  fully  learned  how  to  discriminate.  They  now  rely 
to  a  great  extent  upon  their  confidence  in  the  judgment  and  standing 
of  the  issuing  houses  that  offer  these  investments.  But  finally  the 
public  itself  learns  to  differentiate  between  the  good  and  the  bad,  and 
it  is  only  by  a  record  of  solvency  and  proper  administration  that  its 
approval  and  interest  can  be  permanently  secured.  In  order  to  estab- 
lish this  understanding  and  discernment  on  the  part  of  our  invest- 


PROCEEDINGS.  189 

ing  public,  our  respective  countries  must  become  better  acquainted, 
and  in  this  lies  the  great  value  of  a  conference  like  the  present  one. 
It  is  a  direct  indication  to  our  people  that  both  you  and  we  are 
desirous  to  know  each  other  better,  and  to  enlarge  and  cement  our 
relations  with  each  other.  Ours  is  the  greatest  hemisphere  and  we 
have  few,  if  any,  conflicting  interests.  Our  aims  and  ideals  are  to  a 
great  extent  the  same ;  and  I,  for  one,  feel  confident  that  if  together 
and  in  harmony  we  pursue  these  common  aims  and  ideals  steadfastly, 
we  can  mutually  look  forward  to  a  future  bright  with  promise. 
[Prolonged  applause.] 

GENERAL  ANNOUNCEMENTS. 

Secretary  McAooo.  Gentlemen,  I  desire  to  make  one  or  two  an- 
nouncements. The  next  general  session  of  the  Conference  will  be 
on  Thursday  morning  at  10  o'clock.  That  provides  for  group  con- 
ferences this  afternoon  and  all  of  to-morrow.  On  Thursday  morn- 
ing we  can  take  up  any  subjects  which  need  further  elucidation 
or  discussion  in  general  conference.  I  hope  the  group  committees 
will  devote  themselves  energetically  to  the  matters  they  have  before 
them. 

You  will  find  on  the  program  the  designations  of  the  rooms  in  the 
Shoreham  Hotel  for  each  of  the  group  committees.  I  wish  to  say 
that  the  committee  on  uniformity  of  laws  meets  in  this  building  this 
afternoon  at  4  o'clock  in  the  room  just  behind  the  platform,  and  I 
hope  all  of  the  members  of  that  committee  will,  if  possible,  be  in 
attendance. 

The  transportation  committee,  appointed  this  morning,  is  requested 
to  meet  on  Wednesday,  that  is  to-morrow,  at  the  Hotel  Shoreham, 
in  room  99,  at  12  o'clock.  Please  do  not  forget  that,  and  if  any 
members  of  that  committee  are  not  present  I  hope  those  of  you 
who  have  heard  the  announcement  will  communicate  it  to  them.  It 
will  also  be  published  in  the  newspapers. 

The  Secretary- General  has  one  or  two  matters  that  he  desires  to 
submit  before  we  adjourn. 

The  Secretary-General,  Dr.  ROWE.  Gentlemen,  I  wish  to  ask  the 
representatives  from  the  United  States  to  register  to-day  on  their  way 
out.  It  is  especially  important  that  we  should  have  your  addresses  in 
Washington.  We  have  not  as  yet  been  able  to  secure  them  all.  I 
desire  to  ask  therefore  that  the  members  from  the  United  States 
register  in  the  special  book  at  the  foot  of  the  stairs.  I  may  say  also 
that  this  registering  is  very  important  because  we  have  a  great  many 
letters  to  be  distributed.  Some  of  them  are  here  on  the  platform,  and 
I  will  have  the  names  read  in  order  that  those  to  whom  they  are 


190  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

addressed  may  get  them.  I  also  have  two  telegrams  which  I  will 
deliver  to  the  gentlemen  to  whom  they  are  addressed. 

I  wish  to  say  that  a  new  edition  of  the  program  will  be  completed 
to-day  and  will  be  distributed  to-morrow,  containing  all  the  group 
conference  committees.  I  also  desire  to  state  that  this  afternoon 
you  will  have  thirty  galley  proofs  of  the  group  conference  committees 
which  will  be  distributed  in  the  committee  rooms. 

Furthermore,  I  wish  to  announce  that  there  will  be  an  official 
photograph  taken  of  all  the  members  of  the  Conference  immediately 
after  adjournment  to-day,  if  the  members  will  remain.  The  photo- 
graph will  be  taken  in  front  of  the  building. 

Secretary  McAcoo.  The  Conference  will  now  adjourn  until  Thurs- 
day morning. 

(Accordingly,  at  1.10  p.  m.,  the  Conference  adjourned  until  Thurs- 
day, May  27,  1915,  at  10  o'clock  a.  m.) 


FOURTH  SESSION 


THURSDAY  MORNING,  MAY  27,  1915 


191 


FOURTH  SESSION,  THURSDAY  MORNING,  MAY  27. 


The  Conference  was  called  to  order  at  10  a.  m. 

Secretary  McAooo.  Gentlemen,  I  wish  to  offer  you  greetings  and 
to  congratulate  you  upon  the  beautiful  weather  we  are  having 
in  Washington,  and  also  to  express  the  hope  that  you,  individually 
and  collectively,  are  feeling  well  and  capable  of  doing  a  great 
deal  more  work  before  this  Conference  adjourns. 

COMMITTEE  APPOINTMENTS. 

I  was  handed  yesterday  afternoon  the  final  edition  of  the  program. 
There  are  a  few  errors  in  it.  I  wish  to  say  that  my  attention  was 
called  after  the  announcement  of  the  two  large  committees',  made  the 
other  day,  to  the  fact  that  on  the  Committee  on  Transportation 
neither  the  Mississippi  Valley  nor  the  city  of  New  Orleans  was 
represented.  I  took  the  liberty  of  appointing  during  the  recess 
Mr.  Sol  Wexler,  of  New  Orleans,  and  Hon.  David  E.  Francis, 
of  St.  Louis,  to  this  committee,  and  I  announced  the  other  morning 
that  Mr.  Benjamin  R.  Strong,  jr.,  of  New  York,  governor  of  the 
Federal  reserve  bank  of  that  city,  was  appointed  to  membership  on 
the  Committee  on  Uniform  Laws  and  International  Trade  Court. 
By  error  the  program  has  him  assigned  to  the  Committee  on  Trans- 
portation. As  the  Transportation  Committee  already  has  quite  a 
large  representation  from  New  York,  I  felt  that  Mr.  Strong  had 
better  act  in  the  other  capacity,  and  I  want  to  correct  that  error  in 
the  program. 

CONGRATULATORY  TELEGRAMS  RECEIVED. 

We  have  a  cablegram  this  morning  from  the  President  of  Argen- 
tina which  I  shall  ask  the  Secretary- General  to  read  to  the  Con- 
ference. 

The  Secretary-General,  Dr.  Rowe : 

BUENOS  AIRES,  May  26. 
CHAIRMAN  OF  THE  PAN  AMERICAN  FINANCIAL  CONFERENCE, 

Washington,  D.  €.: 

On  behalf  of  the  Government  and  people  of  the  Argentine  Republic  I  beg 
to  thank  you  most  cordially  for  the  congratulations  which  Your  Excellency 

98257°— -15 13  193 


194  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

was  good  enough  to  send  me  in  the  name  of  the  Pan  American  Financial  Con- 
ference ;  and  I  have  great  pleasure  in  offering  to  the  Conference,  through  its  very 
worthy  chairman,  my  sincere  wishes  for  the  success  of  its  deliberations,  confi- 
dent that  they  will  be  most  beneficial  in  furthering  the  economic  development 
of  all  the  Republics  of  America  and  in  establishing  closer  relations  between 
them. 

ViCTORINO   DE  LA   PLAZA, 

President  Argentine  Republic. 

[Applause.] 

The  Secretary-General  then  read  the  following  telegram  from  the 
National  Association  of  Manufacturers,  in  session  in  New  York : 

NEW  YORK,  May  26. 
CHAIRMAN  OF  THE  PAN  AMERICAN  FINANCIAL  CONFERENCE, 

Washington,  D.  C.: 

The  National  Association  of  Manufacturers  of  the  United  States  of  America 
in  convention  assembled  extends  to  the  delegates  of  the  Pan  American  Financial 
Conference  its  heartiest  greetings  and  expresses  the  hope  that  the  Conference 
will  result  in  increased  cooperation  between  the  countries  of  the  Americas  in 
matters  of  finance,  commerce,  and  industry,  and  believes  that  its  work  will 
strongly  influence  the  movement  in  favor  of  more  direct  interchange  of  products 
of  Latin  America  and  of  the  United  States,  and  pledges  the  active  assistance 
of  the  association's  widespread  membership  in  looking  after  the  welfare  of  the 
delegates  in  the  cities  which  they  will  visit. 

THE  NATIONAL  ASSOCIATION  OF  MANUFACTURERS, 
GEORGE  COPELAND,  President. 

(The  telegram  was  translated  into  Spanish  by  the  Secretary- 
General.) 

Secretary  McAooo.  Before  we  begin  the  regular  proceedings,  I 
should  like  to  make  this  announcement:  The  luncheon  which  is  to 
be  held  here  to-day  is  not  a  formal  luncheon;  I  mean  that  no  formal 
invitations  have  been  issued.  All  the  members  of  the  Conference  and 
their  secretaries,  of  course,  are  cordially  invited,  and  we  hope  that  the 
representatives  of  the  press  will  also  come  as  our  guests.  I  thought  I 
had  better  make  this  announcement  now,  because  I  understand  there 
seems  to  be  some  doubt  about  it.  The  door  is  open  and  the  latch- 
string  hangs  on  the  outside,  but  if  the  door  appears  to  be  closed 
all  you  have  to  do  is  to  pull  the  string  and  join  in  the  good  fellowship 
the  occasion  offers.  I  hope  that  every  one  of  you  will  make  it  a 
point  to  be  present,  because  after  luncheon  you  will  take  the  yacht 
Mayflower  and  go  to  Mount  Yernon.  Luncheon  will  be  served  in  the 
room  below  this  one. 

Gentlemen,  I  now  have  the  honor  of  introducing  to  you  the  Honor- 
able Joseph  E.  Davies,  who  is  chairman  of  the  newly  organized 
Federal  Trade  Commission  and  who  has  been  kind  enough  to  agree  to 
address  you  on  this  occasion.  [Applause.] 


PROCEEDINGS.  195 

ADDRESS  OF  HON.  JOSEPH  E.  DAVIES,  CHAIRMAN  OF  THE 
FEDERAL  TRADE  COMMISSION. 

MEMBERS  OF  THE  PAN  AMERICAN  FINANCIAL  CONFERENCE,  LADIES 

AND  GENTLEMEN  : 

This  meeting  of  distinguished  citizens  of  the  Pan  American  Re- 
publics is  of  epochal  significance.  It  is  held  among  international  con- 
ditions of  the  most  stupendous  and  momentous  character  that  the 
world  has  ever  experienced.  For  the  Federal  Trade  Commission  I 
am  commissioned  to  say  that  it  is  desirous  of  doing  all  things,  that  in 
its  powers  lie,  to  further  and  extend  the  beneficent  purposes  and  ef- 
fects of  this  great  Conference. 

CONFERENCE    DISTINCTIVE   OF   THE    SPIRIT   OF   THE   AMERICAS. 

It  is  distinctive  of  the  genius  of  the  Americas  that  the  vision  of 
one  of  the  greatest  Secretaries  of  the  Treasury  of  the  United  States 
should  have  conceived  this  idea,  and  that  the  enlightened  and  pro- 
gressive statesmanship  of  eighteen  republics  should  have  grasped,  sus- 
tained, and  executed  this  altogether  remarkable  plan.  This  meeting, 
indeed,  typifies  both  the  ideal  and  practical  quality  of  the  genius  of 
the  American  Republics.  [Applause.] 

COUNCILS  OF  WAR  AND  COUNCILS  OF  PEACE. 

Across  the  seas,  councils  of  the  commanding  brains  of  the  nations 
of  Europe  are  also  engaged  in  great  problems,  pertaining  to  the 
mobilization  of  men  and  money  for  the  purposes  of  war.  This 
council  of  the  Americas  is  held  to  marshal  the  great  forces  of  peace 
into  conditions  that  make  for  mutual  helpfulness.  The  genius  of 
Europe  is  addressed  to  war;  the  spirit  of  the  Americas  is  turned 
toward  peace.  From  the  deliberations  here  there  will  come  no 
colossal  destruction  of  property,  no  horrible  sacrifice  of  men,  no 
anguishing  hearts  of  women,  no  orphaning  of  children,  no  burdens 
of  inferior  race  production  and  increased  taxation  for  posterity. 
Your  deliberations  are  fertile  with  the  promise  that  greater  argosies 
of  peace  and  good  will  will  sail  the  seas;  that  more  factories  will 
hum;  that  more  men  will  be  at  work;  that  the  standard  of  living 
may  be  raised;  that  more  children  may  be  educated;  that  more 
women  may  attend  to  their  household  cares  singing  with  the  con- 
tentment of  peace  as  the  days  go  by;  and  that  the  ideals  of  re- 
publican altruism  may  demonstrate  to  a  world  gone  mad  that  the 
gospel  of  the  Carpenter  of  Galilee  is  not  a  lie,  but  a  living  hope  and 
beacon  for  the  Republics  of  the  Americas,  in  their  contribution  to 
the  world  and  to  its  civilization. 


196  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

It  is  in  keeping  with  the  practicalities,  judgment,  and  wisdom 
characteristic  of  the  American  financier,  master  of  industry,  and 
statesman,  that  this  common  council  of  the  nations  of  this  continent 
should  be  held  at  this  crisis  in  international  conditions.  The  Euro- 
pean war  has  altered  and  will  alter  the  trade  courses  of  the  world. 
It  has  served  to  give  us  all  pause,  to  analyze  conditions  that  have 
been  permitted  to  grow  and  to  obtain,  while  we  were  secure  in  the 
confidence  of  peace,  and  lulled  into  indifference  by  temporary  ad- 
vantage. This  war  has  startled  us  into  a  realization  of  the  direction 
in  which  we  were  drifting,  and  the  courses  of  trade  which  the  nations 
of  this  continent  had  permitted  to  develop.  Problems  have  been  thus 
rudely  thrust  upon  us  all  alike.  This  upheaval  of  conditions  over- 
night has  brought  similar  consequences  to  the  republics  of  this 
hemisphere.  The  dilemma  of  the  cotton  planters  of  the  Southern 
States  of  this  country  was  no  more  severe  or  typical  than  that  which 
confronted  the  coffee  planters  of  Brazil,  the  wheat  growers  of  Ar- 
gentina, or  the  nitrate  producers  of  Chile.  The  suspension  of  our 
boards  of  trade  was  duplicated  in  Santiago,  Buenos  Aires,  and  Rio 
de  Janeiro.  We  were  all  in  the  same  boat,  afloat  between  the  Atlan- 
tic and  the  Pacific. 

INTERDEPENDENCE  OF  AMERICAN  REPUBLICS. 

In  this  situation  we  perforce  look  in  upon  ourselves.  Such  read- 
justments as  are  available  we  find  are  largely  dependent  upon  our 
interrelations  which  exist  and  which  may  be  developed.  It  is  to  the 
interest  of  each  of  us,  nationally,  to  develop  commercial  and  financial 
relations  between  ourselves.  This  is  the  underlying  fact  and  problem 
which  confronts  this  Conference. 

MUTUAL  INTEREST  IN  PAN-AMERICAN  TRADE. 

Trade,  if  it  is  to  be  permanent,  must  be  based  on  mutual  advantage. 
Ships  must  bring  us  the  cocoa  and  hides  of  Bolivia,  Venezuela,  and 
Uruguay,  the  coffee,  rubber,  and  ivory  of  Costa  Rica,  Guatemala, 
Nicaragua,  and  Panama,  the  fruit,  potash,  fibers,  and  meats  of  Co- 
lombia, of  Honduras,  Paraguay,  Peru,  and  Salvador.  You  furnish 
these  products  and  others  equal  and  superior  to  similar  products 
produced  anywhere  in  the  world.  We  need  them ;  you  need  our  prod- 
ucts. If  contracts  are  to  be  renewed  and  repeated,  they  must  bring  a 
profitable  consideration  to  both  parties. 

It  is .  suggestive  of  great  promise  that  the  expressions  from  the 
nations  here  represented  all  contain  the  recognition  of  the  fact  that 
the  permanency  of  our 'future  relationships,  and  the  profitableness  of 
them  to  us  all,  must  depend  upon  the  degree  not  alone  of  mutual 


PEOCEEDINGS.  197 

profit,  but  of  mutual  confidence  which  each  nation  has  in  the  integ- 
rity of  the  motives  of  the  others.  Trade,  like  contracts  between  men, 
to  develop  and  to  grow,  must  be  founded  upon  good  faith  between  the 
parties.  Trade  thrives  on  profit,  but  profit  flies  when  trade  lacks 
confidence. 

MUTUAL  CONFIDENCE  DEMONSTRATED  BY  PAST  FACTS. 

It  is  a  matter  of  congratulation  that  in  this  situation  professions 
of  mutual  confidence  and  integrity  of  motive  are  not  limited  to  as- 
surances in  the  future,  but  are  demonstrated  by  accomplishments  in 
the  past.  As  has  been  said  by  a  distinguished  statesman  from  South 
America  in  the  course  of  this  Conference,  the  attitude  of  the  United 
States  toward  Cuba  gave  earnest  of  the  spirit  of  the  American  people 
to  all  the  world,  of  the  integrity  and  sincerity  of  its  altruistic  pur- 
pose and  object.  The  statement  of  the  greatest  proponent  of  peace  in 
the  world,  the  President  of  the  United  States,  made  at  Mobile,  Ala- 
bama, a  year  ago,  bespoke  the  spirit  of  America  in  denying  the  desire 
of  the  United  States  to  attain  by  conquest  a  fraction  of  land  of  this 
continent  other  than  what  it  now  possessed.  The  splendid  service, 
the  generous  spirit,  and  the  unanimity  of  action  of  Argentina,  Brazil, 
and  Chile  in  the  Mexican  mediation  conference,  all  in  the  recent  past, 
and  the  enactment  of  the  peace  treaties,  give  pledge  of  the  sincerity 
and  good  faith  in  the  common  purposes  and  ends  of  the  Republics 
of  this  continent  in  their  dealings  with  each  other.  [Applause.] 

IDENTITY   OF    PRINCIPLES    AUGURS    PERMANENT    RELATIONSHIPS. 

Underlying  these  facts  and  accomplishments  cementing  mutual 
confidence  and  respect  there  is  a  promise  of  permanency  because  of 
the  identity  of  the  principles  underlying  our  governments. 

Fundamentally  the  common  purpose  of  republican  government 
gives  assurance  that  in  our  development  separately  and  in  relation 
with  one  another  we  shall  be  guided  by  a  common  ideal  and  by  a 
similar  purpose,  object,  and  end.  The  problems  of  trade  will  be 
attacked  with  identical  conceptions  of  what  constitutes  the  proper 
attitude  of  government  toward  industry  and  trade  and  of  what  con- 
stitutes justice  and  fairness  to  all  men  in  the  avenues  of  trade. 

The  development  of  the  future  will  be  financial  and  industrial. 
In  both  of  these  there  is  possibility  of  friction  between  nations. 

INTERNATIONAL  MONOPOLY  AND  UNFAIR  COMPETITION. 

Great  industrial  developments  are  imminent  in  the  different  nations 
of  this  hemisphere.  They  will  and  should  be  fostered.  But  it  is 
fortunate  that  in  the  Republics  represented  in  this  Conference  there 


198  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

is  identity  of  attitude  as  to  the  relation  of  government  to  industry 
and  to  its  citizens.  It  has  been  instinctive  to  democracy  to  recognize 
that  monopolistic  private  development  in  the  negation  of  democracy ; 
that  industrial  private  monopoly  is  industrial  tyranny;  that  pro- 
fession of  political  freedom  is  hypocrisy  unless  freedom  of  individual 
opportunity  through  government  is  preserved.  Every  Republic  of 
this  hemisphere  holds  private  monopoly  to  be  indefensible  and  in- 
tolerable and  antagonistic  to  the  spirit  of  republican  conceptions  of 
government.  It  is  fortunate  that  this  common  point  of  view  is 
grounded  on  the  very  foundations  of  our  political  philosophy,  for 
in  the  great  developments  that  are  at  hand  "  enlightened  selfishness  " 
must  control  mammoth  developments  of  power,  which  may  become 
greater  than  the  states  or  nations  of  their  creation.  Monopoly  of  an 
international  character  is  not  a  fear  of  the  future.  It  is  a  fact  of 
the  present.  Unfair  methods  of  competition  to  destroy  rivals  are  not 
confined  to  local  monopoly,  but  may  be  participated  in  by  nations  as 
well.  There  is  no  logical  or  ethical  distinction  between  governments 
and  individuals  or  corporations  if  engaged  in  such  practices.  They 
are  equally  intolerable.  A  common  policy  locally  applied  by  the 
American  nations  gives  promise  of  the  development  of  a  policy 
in  common  internationally  applied  for  the  mutual  protection  of 
all.  Last  May,  in  Paris,  at  the  convention  of  the  chambers  of 
commerce  of  the  world,  it  is  to  be  noted  that  one  of  the  most  im- 
portant committees  appointed,  upon  which  were  placed  representa- 
tives from  all  of  the  industrial  nations  of  the  world  there  repre- 
sented, was  a  committee  to  formulate  a  code  as  to  what  constituted 
unfair  competition  in  international  commerce,  which  code  should  be 
sustained  by  the  enlightened  public  opinion  of  all  the  industrial 
nations.  The  International  Union  for  the  Protection  of  Industrial 
Property,  to  which  there  are  twenty-two  signatures  of  the  nations 
of  the  world,  and  which  expressly  provides  for  the  elimination  of 
unfair  competition,  indicates  the  necessity  for  such  development. 
But  three  of  the  nations  here  in  conference  were  signatories  thereto. 

A  PAN   AMERICAN   INTERNATIONAL,  TRIBUNAL. 

The  fact  that  the  Republics  of  this  hemisphere  founded  their  pol- 
icies with  reference  to  industrial  monopoly  and  industrial  freedom 
of  opportunity  upon  a  common  political  philosophy  augurs  well  for 
the  development  of  a  Pan  American  international  code  of  what  shall 
constitute  fairness  in  trade.  Such  a  code,  if  sustained  by  the  nations 
and  peoples  of  the  Western  Hemisphere,  might  be  interpreted  and 
executed  by  a  Pan  American  tribunal,  and  the  united  judgment  of 
the  Republics  thus  expressed  would  sustain  and  enforce  its  decrees 
by  the  weight  of  an  enlightened  and  common  public  opinion.  Thus 


PROCEEDINGS.  199 

through  the  instrumentalities  of  trade  and  commerce  would  another* 
step  toward  the  elimination  of  war  and  the  perpetuation  of  peace  be* 
effected.    The  seed  for  this  hope  may  be  found  in  the  Pan  American 
Union  and  the  identity  of  aspiration  and  policy  of  the  Republics  of 
this  hemisphere. 

DOLLAR   EXCHANGE   AND   DOLLAR    DIPLOMACY. 

No  less  in  the  financial  developments  arising  from  international 
relations  is  there  promise  of  permanent  connections  through  the  estab- 
lishment of  dollar  exchange.  Dollar  exchange  differs  from  dollar 
diplomacy.  The  idea  of  dollar  exchange  contains  no  suggestion  of 
diplomatic  differences  or  conflict  of  interests  which  might  en- 
gender distrust  and  strained  relations  between  the  governments 
involved.  Dollar  exchange  gives  no  special  governmental  support 
to  private  interests.  It  rather  has  to  do  with  the  great  multitude 
of  citizens  engaged  in  dealing  with  each  other  in  different  parts 
of  this  hemisphere  and  is  designed  to  serve  and  aid  them  to  their 
common  benefit.  Dollar  exchange  does  not  seek  an  advantage  over 
a  contested  situation.  It  serves  as  a  medium  for  the  more  facile 
exchange  of  commodities  to  the  advantage  of  both  parties  thereto. 
It  incurs  no  risk  of  imposition  by  a  stronger  state  upon  a  weaker 
by  reason  of  a  mistake  or  a  misuse  of  power.  Commercial  advantage 
for  the  benefit  of  all,  not  service  to  the  advantage  of  the  few,  is  the 
end  and  purpose  of  government  participation  in  dollar  exchange. 

THE  MISSION  OF  THE  REPUBLICS  OF  THE  AMERICAS. 

In  conclusion,  will  you  permit  me  to  say  that  the  nations  here  rep- 
resented are  the  exponents  of  a  great  ideal,  one  of  the  greatest  ideals 
in  the  world;  an  ideal  which  has  inspired  every  thinker,  teacher,  or 
benefactor  of  civilization ;  an  ideal  which  has  moved  men  and  nations 
to  splendid  and  noble  deeds  and  accomplishments — the  ideal  of 
altruism.  Republican  self-government  is  the  essence  of  altruistic 
conception.  Democracy,  the  government  for  the  common  man,  is 
the  translation  of  the  Sermon  on  the  Mount  into  terms  of  national 
entity.  And  in  the  chaos  of  world  ideals  that  has  upset  the  course 
of  civilization  within  the  past  year,  it  is  the  mission  of  the  repub- 
lics of  the  earth  to  place  upon  their  thresholds  and  bind  as  frontlets 
upon  their  brows  those  fundamental  principles  on  which  the  fathers 
founded  these  nations  and  by  reason  of  which  these  nations  have  en- 
dured and  brought  blessings  and  peace  to  their  citizens  and  to  us. 

We  arc  of  different  races  and  tongues  and  creeds,  but  we  have  this 
heritage  in  common:  Our  ancestors  all  had  the  virtue  and  vigor  of 
the  pioneer.  They  sought  betterment  for  themselves  and  their 
children.  They  came  to  a  new  country;  they  dreamed  dreams,  and 


200  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

.•endured  hardships  for  the  sake  of  their  dreams.  They  dedicated 
%he  best  years  of  their  manhood  and  all  of  their  interests  to  create, 
serve,  and  perpetuate  a  government  that  should  be  dedicated  to  the 
common  good  of  all  men.  This  service  they  have  rendered  to  their 
country  and  to  us,  their  children.  We  therefore  have  in  common  the 
hopes  and  aspirations  of  our  fathers.  We  have  in  common  bequeathed 
to  us  those  ideals  which  Bolivar,  Eosas,  and  San  Martin,  and  the 
founders  of  this  government  fought  for,  and  on  which  our  govern- 
ments were  founded.  Our  traditions,  our  purpose,  our  aspirations, 
all  invite  friendship,  mutual  trust,  mutual  helpfulness. 

Our  hope  suggests  a  probable  common  part  in  contributing  to 
civilization  the  practical  realization  of  that  ultimate  service  of  gov- 
ernment to  society,  which  every  teacher,  prophet,  seer,  or  saint  has 
sought — the  happiness  of  man.  [Prolonged  applause.] 

Secretary  McAooo.  It  seems  almost  superfluous  for  me  to  intro- 
duce the  next  speaker,  who  is  so  well  known  to  all  of  you.  However, 
I  take  great  pleasure  in  introducing  the  Honorable  John  Barrett. 

ADDRESS  OF  HON.  JOHN  BARRETT,  DIRECTOR  GENERAL  OF  THE 
PAN  AMERICAN  UNION. 

MR.  SECRETARY,  DELEGATES  FROM  LATIN  AMERICA,  MEMBERS  OF  THE 
CONFERENCE,  AND  LADIES  : 

I  would  not  be  responding  to  the  sentiment  that  wells  up  in  my 
heart  if  I  did  not  say  to  you,  Mr.  Secretary,  that  every  man  in  this 
country  who  has  been  interested  in  the  growth  of  practical  Pan 
Americanism  feels  like  extending  to  you  sincere  congratulations  for 
having  called  together  this  notable  assemblage,  and  I  think  I  indulge 
in  no  exaggeration  when  I  say  that  by  this  act  you  have  enrolled 
yourselves  among  the  great  Pan  Americans.  [Applause.] 

As  one  who  has  attended  many  conferences,  including  some  that 
have  met  in  this  building,  I  wish  in  passing  also  to  compliment  you 
on  having  such  an  efficient  Pan  American,  such  an  interested  Pan 
American,  such  an  experienced  Pan  American,  as  your  Secretary- 
General,  Dr.  Eowe.  [Applause.] 

And  as  I  have  watched  these  men  working  out  the  details  for  this 
Conference  and  have  seen  the  difficulties  they  have  had  to  meet  I 
want  also  to  say  that  much  credit  is  due  to  the  cooperation  that  these 
gentlemen  have  had  from  the  Assistant  Secretary  of  the  Treasury, 
Mr.  Peters,  and  from  the  Secretary-General's  Assistant  Secretaries, 
Mr.  Sands,  Mr.  Miles,  Mr.  Gittings,  and  Mr.  Parker.  [Applause.] 
I  think  it  is  only  fair  to  them  to  say  this;  and  I  am  in  a  position 
to  make  this  reference  where  some  others  might  hesitate,  because  I 
know  how  hard  they  have  worked  to  make  the  Conference  succeed. 


PEOCEEDIKGS.  201 

I  think  it  is  a  most  impressive  thing — I  say  this  particularly  to 
the  members  of  the  Conference  from  the  United  States — one  of  the 
most  impressive  things  that  can  possibly  be  in  your  minds  in  con- 
nection with  the  personnel  of  this  Conference,  namely,  the  class  of 
men  whom  the  governments  of  Latin  America  have  sent  to  this  Con- 
ference. [Applause.]  Not  to  express  any  words  of  flattery,  but 
simply  to  tell  the  truth,  in  the  voice  of  one  who  has  had  to  watch  the 
history  and  the  development  of  Latin  America,  I  want  to  say  that 
not  one  Government  has  sent  other  than  its  very  first  men  to  be  par- 
ticipants in  this  Conference  [applause],  and  you  know  what  that 
means  for  the  carding  out  of  the  work  of  this  gathering  after  it 
has  adjourned  and  these  various  delegates  have  returned  to  their 
respective  countries.  I  may  say  also  to  the  delegates  from  Latin 
America  that  the  men  whom  the  Secretary  of  the  Treasury  has  in- 
vited to  meet  you  here  are  also  the  first  men  of  our  country  in  their 
respective  occupations.  [Applause.] 

May  I  now  prove  to  you  that  I  am  not  indulging  in  superfluous 
phrases  in  citing  just  a  few  facts?  The  Pan  American  Union,  if  any- 
thing, ought  to  be  a  barometer  of  Pan  American  feeling  in  Latin- 
America  and  in  the  United  States ;  and  as  I  speak  of  the  Pan  Ameri- 
can Union,  remember  that  I  do  not  speak  of  it  with  any  reference 
to  the  persons  who  are  its  officers  or  its  staff,  although  I  want  to  say 
it  has  a  strong  staff,  which  has  always  given  me  skilled  assistance. 
But  I  speak  more  of  it  in  the  form  of  being  the  office  of  the  govern- 
ing board,  which  is  made  up  of  the  ambassadors  and  ministers  of 
the  Latin-American  countries  and  the  Secretary  of  State  of  the 
United  States.  The  Pan  American  Union's  policies  and  acts  are 
entirely  in  their  charge,  and  they  deserve  the  credit  for  what  has 
been  accomplished. 

Now,  please  notice  the  following  contrasts  as  proving  to  you  that 
what  I  say  about  Pan  America  and  Pan  Americanism  is  no  matter 
of  imagination  upon  my  part.  Eight  years  ago,  ladies  and  gentle- 
men, this  organization  owned  not  one  penny  of  property  and  was 
housed  in  a  little  old  house  on  Lafayette  Square.  To-day  its  build- 
ing, this  palace  of  commerce  and  comity,  and  its  grounds,  represent 
an  investment  of  $1,100,000.  This  building  has  been  described  by 
the  greatest  living  French  architect  in  an  address  which  he  delivered 
before  the  Sorbonne,  in  Paris,  at  a  meeting  presided  over  by  Presi- 
dent Poincare,  following  a  trip  this  architect  made  around  the 
world,  as  combining  for  its  cost,  beauty  of  architecture,  and  useful- 
ness of  purpose  more  than  any  other  public  building  in  the  wide 
world.  [Applause.] 

Eight  years  ago  a  staff  of  only  twenty-five  persons  took  care  of  all 
the  work  that  this  organization  carried  on.  To-day  there  is  a  staff  of 


202  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

seventy-five  men  and  women,  experts  on  every  phase  of  international 
relationship.  Eight  years  ago  the  total  revenues  of  this  organization 
were  less  than  $50,000  a  year,  with  the  majority  of  the  countries  in 
arrears.  Now  the  total  revenue  is  approximately  $145,000,  with  prac- 
tically no  country  in  arrears.  Mind  you,  moreover,  that  I  am  speak- 
ing of  this  organization  as  being  twenty  twenty-firsts  Latin  Ameri- 
can! I  want  the  representatives  of  the  United  States  to  take  that 
into  consideration  as  showing  the  significance  of  Pan  Americanism, 
for  it  should  give  you  encouragement  for  the  work  which  is  ahead  of 
you.  In  this  building  is  the  Columbus  Memorial  Library,  which  eight 
3^ears  ago  had  less  than  10,000  volumes.  Now  it  has  over  35,000  vol- 
umes, and  the  most  practical  collection  of  Americana  to  be  found  in 
the  Western  Hemisphere.  To  use  that  library  there  were,  eight  years 
ago,  only  about  10,000  cards.  Now  there  are  150,000  cards,  covering 
every  country  and  every  subject  relating  to  them.  Then  we  had  a 
collection  of  only  500  photographs.  Now  there  are  15,000  to  16,000 
photographs,  showing  every  country  and  every  city  and  every  town 
and  practically  every  section  of  the  twenty  countries  which  reach 
from  the  United  States  south  to  Argentina  and  Chile. 

Eight  years  ago  this  office  distributed  less  than  80,000  pieces  of 
printed  matter  in  a  year.  This  year  the  distribution  will  pass  the 
mark  of  800,000 !  I  ask  you,  men  of  the  United  States,  is  not  that  a 
most  practical  evidence  of  the  interest  of  the  people  of  the  world  in 
these  countries  lying  south  of  us,  for  not  one  of  those  pamphlets  and 
reports  has  been  sent  out  except  in  response  to  particular  requests. 
In  those  days  the  Monthly  Bulletin  of  the  Pan  American  Union,  the 
organ  of  the  progress  and  development  of  Latin  America,  had  no 
demand.  Its  distribution  was  practically  nil.  Now  some  15,000 
copies  are  published  each  month,  and  it  does  not  meet  half  the  de- 
mand. It  is  published  not  alone  in  English,  but  in  Spanish,  in  Portu- 
guese, and  in  French.  It  is  a  magazine  which  the  German  Emperor 
once  said  he  regarded  as  the  most  interesting  and  instructive  official 
publication  in  the  world. 

I  might  go  on  and  mention  other  facts  like  these,  but  I  know  this 
will  interest  the  Latin  American  delegates:  Eight  years  ago,  when 
we  investigated  the  universities  and  colleges  of  this  country,  we  found 
only  about  nine  or  ten  that  had  any  regular  courses  in  Spanish.  Now, 
as  a  result  largely  of  the  efforts  of  this  international  organization, 
233  universities,  colleges,  and  higher  educational  institutions  have 
regular  courses  in  the  Spanish  language.  [Applause.] 

In  the  early  part  of  1907,  in  response  to  a  circular  letter  which  we 
sent  out,  we  found  only  twenty-five  high  schools  in  the  United  States 
that  gave  any  attention  to  the  study  of  Spanish.  Our  recent  record 
shows  over  1,100  high  schools  in  1,100  different  cities  and  towns  of 


PROCEEDINGS.  203 

the  United  States  taking  up  the  study  of  the  Spanish  language  upon 
the  recommendation  of  the  Pan  American  Union.  [Applause.] 

In  the  year  1907  the  members  of  the  staff  of  the  Pan  American 
Union  received  twenty-one  invitations  from  commercial  organiza- 
tions, chambers  of  commerce,  and  societies  throughout  the  country,  to 
discuss  Latin  America.  Last  year,  the  year  1914,  889  invitations  were 
received,  covering  every  State  and  Territory  of  the  United  States,  and 
some  seven  or  eight  foreign  countries.  One  of  our  statisticians,  who 
is  a  very  clever  man  and  who  watches  things  closely,  informs  me  that 
in  the  month  of  April  the  newspapers  of  the  United  States  gave  more 
space  to  Latin  America  in  one  month  than  they  did  in  the  three 
years  of  1907,  1908,  and  1909.  [Applause.1]  He  also  informs  me 
that  the  magazines  of  the  United  States  had  more  articles  in  Janu- 
ary, February,  and  March  on  Latin  America  than  in  the  five  years 
from  1907  to  1912.  Is  there  any  better  evidence  of  the  growth  of 
tangible  Pan  Americanism  than  that  fact?  A  great  book  publisher 
told  me  the  other  day  that  more  books  relating  to  Latin  America 
were  published  in  1914  than  in  the  entire  period  from  1906  to  1910. 
These  facts,  I  think,  should  be  borne  in  mind,  especially  by  the  Latin- 
American  delegates,  that  they  may  know  the  growth  of  interest  in 
this  part  of  the  world  regarding  Latin  America.  And,  correspond- 
ingly, I  want  to  say  that  the  number  of  inquiries  which  the  Pan 
American  Union  received  in  the  form  of  letters  and  telegrams  from 
all  over  Latin  America  about  the  United  States  are  500  per  cent 
greater  than  they  were  five  years  ago.  That  certainly  shows  a 
reciprocal  attitude  that  is  worth  while. 

In  the  matter  of  trade  in  these  years  the  total  commerce  of  Latin 
America — that  is,  of  these  twenty  countries  from  Cuba  and  Mexico 
south  to  Argentina  and  Chile— has  grown  from  $1,800,000,000  to 
nearly  $3,000,000,000,  a  tremendous  increase  of  over  a  billion  dollars 
in  that  period. 

And  we  find,  if  we  take  the  commerce  of  the  United  States,  that 
in  that  period  the  total  value  of  the  exchange  of  products  between 
the  United  States  and  these  twenty  countries  has  increased  from  a 
little  less  than  $500,000,000  to  more  than  $800,000,000. 

Our  records  show  that  during  the  last  seven  years  over  3,000 
men,  firms,  and  companies  have  recorded  themselves  in  this  office 
as  desiring  information  preparatory  to  doing  business  in  Latin 
America,  in  contrast  to  less  than  300  for  the  previous  period  of 
years  before  that. 

Now,  honor  bright,  delegates  of  Latin  America,  honor  bright,  you 
men  of  the  United  States,  is  not  this  record  of  the  last  few  years, 
not  alone  of  the  Pan  American  Union,  no,  but  this  record  of  the 
growth  of  interest  both  in  Latin  America  and  in  the  United  States,  a 


204  PAN  AMERICAN   FINANCIAL   CONFERENCE. 

forceful  reason  for  your  believing  that  your  efforts  here  are  not  by 
any  means  going  to  be  in  vain  ? 

The  position  of  this  Pan  American  Financial  Conference  in  Pan 
American  history  will  be  determined  by  its  actual  and  practical 
results  for  Pan  American  commerce  and  comity.  Let  us,  therefore, 
note  some  of  the  conditions  surrounding  its  formation. 

This  gathering  is  the  inevitable  climax  of  a  great  present-day 
Pan  American  movement,  which  is  the  natural  and  logical  evolution 
of  world  conditions  of  the  hour.  The  whole  Western  Hemisphere  is 
in  sympathy  with  it,  and  the  entire  world  is  watching  it. 

Its  results  will  not  alone  affect  America  but  Europe  and  even 
Asia.  It  is  not  in  any  sense  a  movement  antagonistic  to  the  Old 
World,  and  yet  the  Old  World  is  largely  responsible  for  it. 

If  there  is  a  silver  lining  to  the  war  cloud,  it  is  the  development  of 
Pan  American  solidarity.  No  great  historical  event,  since  the  dec- 
laration of  the  Monroe  Doctrine  in  1823,  has  done  more  to  awaken 
the  governments  and  peoples  of  both  North  and  South  America  to  a 
true  appreciation  of  their  common  interests.  Never  before  have  the 
press  and  people  of  each  and  all  of  the  American  nations  said  so 
many  sympathetic  and  kind  things  of  each  other  as  they  are  now 
doing. 

The  measure  of  the  success  of  this  Conference  will  be  the  actual 
good  it  accomplishes  for  every  Kepublic  participating.  Practical 
Pan  Americanism  should  be  its  chief  characteristic.  Everybody  is, 
therefore,  desirous  that  it  should  initiate  undertakings  and  propo- 
sitions that  can. and  will  be  consummated. 

The  Conference  is  marked  by  enthusiasm  and  hard  work,  but  the 
real,  absolute,  and  lasting  test  of  its  value  will  come  in  a  year's  time. 
What  will  have  been  positively  achieved  in  May,  1916,  as  a  direct 
result  of  this  gathering  will  determine  its  position  in  the  history  of 
Pan  American  conferences. 

It  is  hoped,  therefore,  that  the  delegates,  members,  and  friends 
of  this  Conference  will  not  forget  that  this  is  only  one  of  a  remark- 
able chain  of  Pan  American  gatherings  which  have  assembled  in 
different  capitals  of  the  Western  Hemisphere  during  the  last  twenty- 
five  years.  It  would  be  unfortunate  to  overlook  these  other  meetings 
in  which  all  of  the  American  governments  participated  with  par- 
ticular interest  and  attention.  It  would  be  uncomplimentary  to  Latin 
America  if  we  were  to  look  upon  this  present  Conference  as  a  new 
departure. 

We  should  not,  in  our  earnestness  of  this  hour,  forget  to  give  credit 
to  the  nations  and  men  who  inspired  and  participated  in  the  First 
Pan  American  Conference,  which  met  in  Washington  during  the 


PROCEEDINGS.  205 

winter  of  1889-90 ;  the  Second  Pan  American  Conference,  which  met 
at  Mexico  City  during  December  and  January  of  1901-2;  the  Third 
Pan  American  Conference,  which  was  in  session  at  Kio  de  Janeiro, 
Brazil,  through  July,  1906;  the  Fourth  Pan  American  Conference, 
which  met  at  Buenos  Aires  during  July  and  August,  1910 ;  and  also 
the  Fifth  Pan  American  Conference,  which  was  to  have  met  at 
Santiago,  the  capital  of  Chile,  in  December,  1914,  and  for  which 
the  Chilean  Government  had  made  elaborate  preparations  but  which 
was  postponed  on  account  of  the  war. 

At  all  of  these  conferences,  as  the  records  clearly  show,  many  of 
the  principal  questions  of  this  present  Conference — especially  prob- 
lems of  commerce  and  transportation — were  minutely  discussed  and 
followed  by  the  adoption  of  excellent  resolutions.  That  practical 
results  did  not  follow  was  not  due  to  any  lack  of  interest  and  action 
on  the  part  of  these  conferences  and  the  delegates  themselves,  but  to 
the  lack  of  interest  and  action  on  the  part  of  some  of  the  govern- 
ments after  the  conferences  had  adjourned. 

In  this  connection,  moreover,  let  us  not  forget  that  this  is  not  even 
the  first  Pan  American  Financial  Conference,  for,  on  January  7, 
1891,  there  assembled  in  Washington  the  International  American 
Monetary  Conference,  which  adjourned  only  after  nearly  four 
months'  labor  and  study  of  the  problems  before  it.  There  were  also 
held  the  great  Pan  American  Customs  Conference  and  the  Pan 
American  Coffee  Conference,  which  were  in  session  for  a  consider- 
able period  in  New  York  City  in  October,  1902,  and  January,  1903, 
respectively. 

At  all  these  notable  gatherings  most  important  action  in  the  form 
of  resolutions  was  taken,  but  there  the  active  interest  ended.  In  the 
case  of  all  of  them  there  were  widespread  interest,  splendid  speeches, 
large  attendance,  and  decided  optimism,  but  when  they  adjourned 
there  seemed  to  set  in  a  tide  of  other  interests  or  inaction  which 
were  fatal  to  great  practical  results. 

It  would  seem,  therefore,  to  be  proper  for  the  members  of  this  Con- 
ference— especially  those  who  come  from  the  United  States  and  those 
to  whom  it  is  a  new  idea  and  to  whom  it  appeals  as  a  new  oppor- 
tunity— to  remember,  with  thought  of  those  who  have  labored  in  the 
field  before  them,  that  it  is  only  one  in  a  long  succession  of  great 
Pan  American  gatherings  and  that,  if  it  is  to  be  different  from  the 
others  in  the  matter  of  actual  achievement,  they  must  keep  up  their 
work  and  interest  after  the  Conference  adjourns  and  not  cease  their 
endeavors  until  there  has  been  practical  confirmation  of  the  under- 
takings which  they  initiate  in  the  form  of  resolutions  and  recommen- 
dations. 


206  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

For  this  Conference  to  exercise  the  mighty  influence  hoped  for  by 
its  friends  it  must  be  supported  not  merely  by  the  superficial  and  pass- 
ing interest  of  the  governments  and  peoples  of  the  Western  Hemi- 
sphere, but  by  their  deep  and  abiding  interest  and  cooperation,  sup- 
ported by  public  sentiment. 

Let  us  hope,  therefore,  that  this  Conference  may  mark  the  begin- 
ning of  a  far-reaching  Pan  American  movement  among  all  the  Re- 
publics of  the  Western  Hemisphere,  from  the  United  States  on  the 
north  to  Argentina  and  Chile  on  the  south. 

Let  us  hope  that  it  may  awaken  the  commercial,  the  civic  and 
social  societies,  the  universities  and  colleges,  the  rank  and  file  of  busi- 
ness men,  and  in  general  the  people  of  every  Republic  to  a  realization 
of  the  meaning  of  Pan  American  solidarity  and  of  the  common  inter- 
ests, purposes,  and  hopes  of  the  Republics  and  peoples  of  the  New 
World. 

If  such  an  attitude  of  Pan  American  thought  shall  be  the  result  of 
this  Conference,  its  calling  will  be  justified  and  applauded  every- 
where throughout  the  Western  Hemisphere.  [Prolonged  applause.] 

ANNOUNCEMENTS  OF  GENERAL  COMMITTEE  MEETINGS. 

The  Secretary-General,  Dr.  ROWE:  I  should  like  to  make  one  or 
two  announcements  with  respect  to  the  program.  In  the  first  place, 
I  wish  to  inform  the  delegates  and  members  of  the  Conference  that 
their  families  are  cordially  invited  to  participate  in  the  excursion 
this  afternoon,  and  that  it  will  be  a  very  great  help  to  the  members 
of  the  party  if  they  are  here  at  3  o'clock,  in  order  that  they  may  not 
be  too  long  delayed  in  getting  to  the  Navy  Yard. 

Several  delegates  have  requested  me  to  inform  the  delegates  from 
Central  and  South  America  to  meet  here  for  an  informal  conference 
immediately  after  the  morning  session  to  arrange  for  a  subsequent 
meeting.  I  should  also  like  to  ask  when  the  next  meeting  of  the 
Committee  on  Transportation  is  to  be  held,  if  any  member  of  that 
committee  is  present  and  can  inform  me  ? 

Mr.  J.  G.  WHITE.  At  9  o'clock  to-morrow  morning  at  the  Shoreham 
Hotel,  in  the  same  room  where  the  first  meeting  was  held. 

The  Secretary-General,  Dr.  ROWE.  And  the  Committee  on  Uni- 
formity of  Laws — has  the  time  been  fixed  ? 

Mr.  J.  G.  WHITE.  Yes,  sir ;  at  9  o'clock. 

Secretary  McAooo.  At  9  o'clock  to-morrow  there  will  be  another 
meeting  of  the  Committee  on  Transportation,  and  also  a  meeting  of 
the  Committee  on  Uniformity  of  Laws. 


PROCEEDINGS.  207 

COMMITTEE  ASSIGNMENTS. 

Gentlemen,  there  are  a  few  representatives  of  this  country  who 
were  not  here  when  the  committee  assignments  were  made,  and  I  will 
now  assign  them,  as  follows : 

Hon.  John  Hays  Hammond,  of  New  York,  is  assigned  to  the  Com- 
mittee on  Uniformity  of  Laws ;  Hon.  Robert  W.  Woolley,  Director  of 
the  Mint,  to  the  same  committee ;  Mr.  S.  M.  Hastings,  of  Chicago,  to 
the  Bolivian  Committee;  and  Mr.  E.  T.  Meredith,  of  Des  Moines, 
Iowa,  to  the  Colombian  Committee. 

I  see  the  Secretary  of  State  is  in  the  room,  and  I  should  be  very 
happy  if  he  would  come  and  sit  on  the  platform.  We  would  like  to 
have  him  very  much.  [Applause.]  I  would  be  glad  also  if  the  mem- 
bers of  the  Federal  Eeserve  Board  who  are  in  the  audience  and 
members  of  the  Federal  Trade  Commission  will  likewise  come  to  the 
platform.  [Applause.] 

MISCELLANEOUS  BUSINESS. 

The  names  of  five  gentlemen  who  desire  to  say  something  to  the 
Conference  have  been  sent  to  the  desk,  and  the  first  of  those  is  one 
of  our  visiting  delegates.  We  put  no  limitation  of  time  upon  his 
remarks.  We  desire  delegates  to  have  all  the  time  they  wish,  but 
after  the  conclusion  of  their  remarks  the  remainder  of  the  time  will 
be  divided  among  the  four  representatives  of  the  United  States  who 
desire  to  speak,  and  I  will  announce  the  apportionment  as  soon  as  I 
am  able  to  do  so. 

I  shall  now  ask  the  Honorable  Jose  E.  Suay,  of  Salvador,  if  he  will 
please  take  the  platform.  [Applause.] 

Dr.  SUAY  (Salvador)  : 

After  hearing  all  the  wise  observations  and  eloquent  discourses  of 
the  distinguished  delegates  from  the  various  countries,  particularly 
that  of  Dr.  Perez  Triana,  because  it  contains  the  highest  ideas  of 
pure  Americanism,  we  should  endeavor  to  extract  from  them  the 
practical  part  and  reach  practical  conclusions  and  immediate  realiza- 
tion in  the  short  time  that  remains. 

For  this  reason  we  beg  to  submit  the  following  suggestions : 

Not  being  able  to  modify  the  work  of  several  generations  in  a  few 
days,  it  is  our  duty  to  commence  the  work  and  establish  the  primary 
bases,  and  for  this  reason  we  must  examine  the  most  urgent  neces- 
sities. 

What  is  the  principal  object  of  this  conference?  The  commercial 
expansion  of  the  United  States  in  Latin  America,  taking  advantage 
of  the  situation  created  by  the  European  war.  All  the  rest  is  sub- 
sidiary. 


208  PAN  AMERICAN   FINANCIAL  CONFERENCE. 

From  the  standpoint  of  the  Latin  countries  the  corollary  of  that 
premise  should  be :  Given  the  situation  created  by  the  European  war, 
and  the  mutual  necessity  of  extending  American  commerce  in  the 
Latin  Republics  of  the  continent,  to  request  of  American  finance  the 
necessary  elements  for  the  development  of  our  natural  resources  and 
of  our  national  commerce;  that  is  to  say,  to  establish  banks  with 
American  capital  and  by  means  of  them  to  create  larger  and  longer 
credits.  Without  banks  the  work  would  be  deficient  and  would  not 
give  the  desired  results. 

Let  us  examine  the  immediate  and  practical  means  of  extending 
American  commerce  in  our  Republics. 

In  order  to  create  or  extend  commerce,  the  essentials  are — 

1.  Markets. — We  can  furnish  those  in  a  territory  of  more  than 
8,000,000  square  miles,  populated  by  more  than  80,000,000  inhabitants, 
with  customers  from  the  Indian,  who  clothes  himself  with  a  shawl, 
to  the  rich  man,  who  dresses  as  they  dress  in  New  York  and  uses  an 
automobile. 

2.  Good  and  cheap  merchandise  suitable  to  the  customers.    These 
are  problems  of  manufacturing  technique  and  internal  commercial 
organization  which  must  be  settled  by  the  merchant  and  the  American 
manufacturer  and  in  which  the  conference  can  not  intervene. 

In  regard  to  this,  permit  me  to  submit  to  the  consideration  of  the 
conference  the  idea  of  recommending  to  the  United  States  Govern- 
ment, through  the  honorable  Secretary  of  the  Treasury,  that  it  send 
several  commissions  composed  of  merchants,  brokers,  manufacturers, 
and  North  American  bankers  to  the  different  Central  and  South 
American  countries,  in  order  that  they  may  study  the  different 
markets  from  a  commercial  and  economic  point  of  view. 

It  is  certain  that  our  governments  will  receive  them  with  enthusi- 
asm, endeavoring  in  a  slight  degree  to  reciprocate  such  a  cordial  re- 
ception and  so  many  attentions  that  have  been  received  by  us  from 
the  Government,  the  authorities,  and  American  people,  since  we  first 
stepped  upon  the  soil  of  this  great  and  free  country. 

3.  Rapid,  sure,  and  cheap  transportation  of  select  merchandise  and 
natural  products. 

4.  Credit  and  favorable  conditions  in  regard  to  payment. 

In  our  humble  opinion  the  third  and  fourth  points  are  those  which 
it  is  expedient  that  the  conference  study  and  resolve. 

In  regard  to  the  third  point,  or  that  which  refers  to  the  means  oi 
transportation,  there  must  be  found  elements  for  establishing  new 
lines  or  improving  the  existing  ones,  so  that  there  may  be  lines  which 
are  speedy  and  with  fixed  sailing  dates : 

(a)  Between  San  Francisco  and  the  extreme  end  of  South  Amer- 
ica on  the  Pacific. 


PROCEEDINGS.  209 

(5)  Between  San  Francisco  and  New  York  by  way  of  the  canal. 

(c)  Between  San  Francisco  and  the  extreme  end  of  South  Amer- 
ica on  the  Atlantic. 

(d)  Auxiliary  lines  to  complete  and  aid  the  principal  lines,  as 
that  from  New  York  to  Colon  and  from  San  Francisco  to  Panama, 
etc. 

All  these  lines  should  serve  the  intermediate  ports,  having  at 
least  one  port  in  each  country,  and  a  direct  or  semidirect  monthly 
service  with  the  terminal  ports  to  the  north  and  south. 

The  conference  should  recommend  to  all  the  interested  Govern- 
ments : 

1.  Absolute  exemption  of  all  port  dues,  tonnage  dues,  lighthouse 
dues,  etc.,  including  the  tolls  through  the  Panama  Canal. 

2.  Subsidies  in  favor  of  the  steamship  lines. 

In  the  budget  of  the  Republic  of  Salvador  there  is  a  sum  destined 
to  this  end,  which  could  be  increased  if  necessary. 

In  regard  to  the  fourth  point,  or  that  which  refers  to  credit,  it  is 
essential  that  the  conference  study  the  means  of  establishing  banks 
with  sufficient  American  capital  in  each  country.  There  are  two  all- 
important  reasons  which  we  shall  outline  "sine  qua  non":  First, 
because  in  order  to  be  able  to  give  credit  with  the  idea  of  facilitating 
commercial  operations  the  American  merchants  and  manufacturers 
need  local  agents  who  are  in  touch  with  the  commercial  standing  of 
their  customers;  second,  because  in  order  to  have  good  customers 
and  to  extend  business  it  is  important  that  each  country  be  able  to 
develop  its  natural  resources  and  prosper.  Latin  America,  like  every 
new  country,  needs  large  amounts  of  capital  which  would  insure  its 
prosperity  and  transform  it  into  a  more  productive  customer,  com- 
mercially and  economically  speaking.  Thus  the  establishment  of 
American  banks  is  to  the  interest  of  both  parties,  for  without  them 
everything  that  may  be  done  to  the  end  of  extending  American 
commerce  in  our  countries  will  not  give  the  complete  result  which  we 
all  desire. 

In  the  memorandum  which  we  had  the  honor  to  present  to  the 
secretary  general  on  Monday  last  we  spoke  of  other  points,  which 
are  interesting  but  not  essential,  such  as  the  adoption  of  the  metric 
system  in  weights  and  measures  as  a  uniform  system  for  all  the  coun- 
tries represented  in  this  conference,  the  establishment  of  a  uniform 
postal  rate,  etc. 

Our  memorandum  also  moves  for  the  adoption  of  the  American 
monetary  standard,  with  American  money  as  a  uniform  currency 
for  all  America.  As  this  point  is  also  of  great  importance,  if  it  is 
thought  worthy  of  study,  its  adoption  would  be  a  great  step  in  the 
way  of  drawing  the  nations  of  the  new  world  closer  together. 

98257°— 15 14 


210  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

We  conclude  especially  requesting  the  Hon.  William  McAdoo, 
Secretary  of  the  Treasury,  to  use  his  valuable  influence  for  the 
realization  of  the  two  principal  points,  viz,  the  establishment  of  new 
steamship  lines  and  American  banks  in  Central  and  South  America. 
These  two  elements  will  be  the  essential  factors  in  the  extension  of 
American  commerce,  and  thus  the  brilliant  success  of  this  conference 
will  be  the  best  reward  for  the  efforts  of  the  Secretary  of  the 
Treasury. 

Secretary  McADOO.  This  Memorandum  will  be  printed  in  English 
and  distributed  to  the  delegates  as  soon  as  possible.  I  should  have 
the  translation  read  now  except  that  time  is  getting  rather  short. 

The  Honorable  Santiago  Perez  Triana,  of  Colombia,  desires  to  say 
a  few  words.  [Applause.] 

Dr.  PEREZ  TRIANA  (Colombia).  Mr.  Secretary  and  gentlemen,  cer- 
tain printed  rumors  have  reached  me  that  make  it  imperative  for 
me  to  address  you,  but  I  shall  not  take  more  than  thirty-three  seconds 
and  a  half,  I  think.  [Laughter.] 

In  my  remarks  on  the  25th  I  adhered  strictly  to  general  principles, 
and  I  distinctly  said  that  in  cases  of  error  redress  should  take  place 
whenever  possible,  but  that  whenever  the  development  of  history 
should  have  made  redress  impossible,  then  no  hatred  or  rancor  should 
exist,  for  it  is  both  barren  and  pernicious;  and  hatred  as  a  cult 
makes  nations  or  individuals  unfit  for  justice  and  incapable  of  great- 
ness. [Applause.] 

Secretary  McADOO.  I  have  pleasure  in  introducing  Mr.  E.  J. 
Fisher,  of  New  York. 

Mr.  E.  J.  FISHER  (New  York) : 

MR.  SECRETARY,  LADIES,  AND  GENTLEMEN. — In  making  a  brief  sug- 
gestion to  the  Conference,  it  is  not  my  desire  to  invite  discussion,  but 
that  it  be  referred  to  the  proper  general  committee. 

I  have  summarized  what  seems  to  me  to  be  a  thing  in  some  re- 
spects needed  by  the  Conference.  It  is  a  plan  for  the  organization 
of  a  Pan  American  Finance  Commission.  It  is  somewhat  mechan- 
ical, if  you  will  bear  with  me. 

The  Pan  American  Finance  Commission  shall  consist  of  seven  mem- 
bers of  recognized  experience  in  banking  or  finance,  who  shall  be 
appointed  and  subject  to  removal  by  the  Board  of  Directors  of  the 
Pan  American  Union,  and  whose  duty  in  general  shall  be  to  advise 
and  assist  in  the  solution  of  the  fiscal  and  monetary  problems  of  the 
various  nations  of  the  Pan  American  Union.  Each  member  shall 
serve  for  ten  years,  unless  removed  for  cause  to  be  stated  in  a  com- 
munication sent  to  the  President  of  the  country  of  which  he  is  a  citi- 


PROCEEDINGS.  211 

zen.  His  successor  shall  be  appointed  in  the  manner  herein  provided 
and  shall  serve  the  balance  of  the  term.  The  Commission  shall  ordi- 
narily sit  and  have  its  headquarters  in  the  building  of  the  Pan  Amer- 
ican Union  in  Washington,  but  may  give  hearings  and  conduct  in- 
vestigations in  such  cities  of  North  and  South  America  as  may  be 
necessary  in  the  conduct  and  development  of  its  work. 

The  Board  of  Directors  of  the  Pan  American  Union,  after  consulta- 
tion with  the  Federal  Reserve  Board  of  the  United  States,  shall  out- 
line a  tentative  budget  of  annual  expenses  of  the  Commission,  includ- 
ing provision  for  such  salaries  for  its  members  as  will  command  men 
of  the  class  herein  provided,  compensation  for  the  members  of  an 
expert  staff,  and  for  necessary  traveling  and  office  expenses.  Each 
member  of  the  Union  assenting  to  the  general  plan  shall  agree  to 
share  in  the  aggregate  annual  expenses  in  such  proportion  and  in 
such  manner  as  it  now  shares  expenses  for  the  maintenance  of  the  Pan 
American  Union.  The  plan  shall  be  effective  and  binding  upon  each 
assenting  member  for  the  period  of  ten  years  following  the  formal 
organization  of  the  Commission. 

The  Commission  shall  be  organized  upon  the  call  of  the  Director 
General  of  the  Pan  American  Union.  The  Commission  shall  formu- 
late its  own  by-laws  and  shall  elect  from  its  own  membership  a 
president  and  treasurer.  Its  accounts  shall  be  audited  at  least  annu- 
ally in  such  manner  as  may  be  provided  by  the  Board  of  Directors 
of  the  Pan  American  Union. 

The  specific  duties  of  the  Commission  shall  be  as  follows : 

(1)  To  advise  and  assist  in  the  fiscal  development  of  the  various 
countries  of  the  Pan  American  Union,  securing  data  necessary  and 
making  suggestions  in  relation  to  the  stabilization  of  national  credit, 
particularly  the  payment  or  readjustment  of  currency  debt. 

(2)  To  provide  to  the  extent  that  may  be  found  practicable  a 
standard  plan  for  the  deATelopment  of  banking  and  monetary  systems 
for  the  various  countries  in  the  Pan  American  Union  and  the  estab- 
lishment of  a  uniform  currency.     Such  currency  shall  be  developed 
by  and  follow  the  requirements  of  trade.     Such  currency  shall  be 
supported  by  a  gold  reserve,  or  an  equivalent  available  credit,  in 
conjunction  with  a  subsidiary  coinage  based  upon  an  appropriate 
relation  to  the  requirements  of  the  people. 

(3)  The  Commission  shall  particularly  devote  itself  to  investigat- 
ing and  collecting  information  which  would  justify  individuals,  cor- 
porations, or  syndicates  in  granting  loans  from  time  to  time  for 
the  purpose  of  making  effective  the  plan  herein  provided  as  well  as 
for  other  purposes. 

The  plan  for  the  establishment  of  the  Pan  American  Finance 
Commission  shall  be  submitted  to  the  several  countries  by  the  Board 


212  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

of  Directors  of  the  Pan  American  Union,  and  shall  be  effective  and 
binding  upon  each  member  for  the  period  of  ten  years  after  the 
organization  of  the  Commission  upon  the  assent  and  subscription  to 
the  plan  by  at  least  fifteen  members. 

NOTE. — Even  if  a  member  of  the  Pan  American  Union,  such  as  the 
United  States,  may  be  regarded  as  having  fiscal,  monetary,  and  bank- 
ing stability,  yet  its  interest  in  the  development  of  similar  prin- 
ciples among  sister  nations  would  justify  it  in  bearing  its  propor- 
tionate share  of  the  annual  expenses  of  the  Commission. 

Growth  of  domestic  commerce  in  each  country  is  vitally  impor- 
tant to  the  growth  and  development  of  its  foreign  trade.  Nothing 
will  more  successfully  promote  such  a  development  than  a  sound 
internal  banking  and  surrency  system.  No  country  can  be  said  to 
have  such  a  system  where  there  are  constant  fluctuations  in  the  value 
of  its  medium  of  exchange.  [Applause.] 

Secretary  McAooo.  Gentlemen,  there  are  three  others  who  wish  to 
be  heard,  and  there  are  50  minutes  left.  I  shall  apportion  the  time 
equally  between  them,  giving  about  fifteen  minutes  each.  I  will  first 
ask  Mr.  Charles  A.  Conant  to  address  the  Conference. 

Mr.  CHARLES  A.  CONANT  (of  New  York)  : 

MR.  CHAIRMAN  AND  MEMBERS  OF  THE  CONFERENCE. — I  desire  to 
say  only  a  few  words  in  behalf  of  the  important  principle  of  con- 
tinuity in  the  work  of  this  Conference. 

One  of  your  leading  speakers  this  morning  has  pointed  out  that 
there  has  been  a  long  procession  of  Pan  American  conferences,  some 
of  general  character,  and  some  of  specific  character,  but  that  the  work 
has  been  more  or  less  abortive,  or  delayed  in  its  fulfillment,  by  reason 
of  the  fact  that  there  is  no  moving  power  to  press  the  adoption  and 
completion  of  its  labors  upon  the  several  countries  and  interests  rep- 
resented. I  was  therefore  greatly  gratified  in  the  opening  present- 
ment by  the  Secretary  of  the  Treasury  of  the  motives  and  purposes 
of  this  gathering  to  learn  that  it  is  proposed  to  create  a  joint  high 
commission  of  permanent  character  to  pursue  the  work  laid  out  here. 
[Applause.]  That  I  believe  to  be  the  keynote  of  the  success  of  this 
Conference — that  there  shall  be  a  body  which  shall  be  charged  not 
only  with  the  function  of  completing  the  work  which  has  been  begun 
here  in  the  way  of  international  laws,  international  agreements,  and 
financial  projects,  but  that  it  shall  also  have  some  authority  to  bring 
these  subjects  constantly  to  the  attention  of  the  different  Govern- 
ments and  great  financial  interests  involved,  in  order  that  the  re- 
sults, instead  of  disappearing  with  the  adjournment  of  this  Con- 
ference, shall  go  on  as  a  steadily  developing  force. 


PROCEEDINGS.  213 

Personally  I  was  much  gratified  also  to  learn  that  there  would 
probably  be  referred  to  the  committee  charged  with  this  subject  the 
matter  of  uniformity  of  commercial  laws.  That  is  a  subject  not  of 
spectacular  character,  but  one  which  contributes  greatly  to  smooth- 
ing away  the  obstacles  to  international  commercial  intercourse,  and 
1  will  be  pardoned  perhaps  for  saying  a  word  or  two  upon  the 
progress  already  made  in  one  or  two  branches  of  uniformity  in  com- 
mercial law,  because  I  was  myself  the  sole  technical  delegate  of  the 
United  States  at  a  conference  held  at  The  Hague  on  that  subject — 
the  subject  of  the  international  law  of  bills  of  exchange  and  checks. 

The  first  conference,  held  in  the  year  1910,  was  attended  by  repre- 
sentatives of  practically  all  the  powers  of  the  world,  including  most 
of  the  powers  represented  here.  I  expected  to  find  among  the  dele- 
gates from  the  Latin  American  countries  a  few  of  my  associates  at 
The  Hague,  but  so  far  as  I  have  observed,  although  several  were 
originally  named,  none  of  them  are  here  at  the  present  time.  But 
the  second  conference,  in  1912,  agreed  upon  a  definite  form  of  inter- 
national law  governing  the  employment  of  bills  of  exchange.  The 
United  States  and  Great  Britain  alone  did  not  sign  the  protocol  of 
uniform  law  because  of  fundamental  differences  between  the  Anglo- 
Saxon  system,  based  upon  the  common  law,  and  the  proposed  uni- 
form law  based,  in  part,  upon  the  civil  law  descended  from  the 
Code  of  Justinian.  The  United  States  and  Great  Britain,  however, 
in  taking  that  attitude  did  not  by  any  means  imply  the  slightest 
hostility  to  the  adoption  of  the  uniform  law  by  other  powers,  and 
had  this  been  done  before  the  European  war  there  would  have  been 
in  force  but  two  great  systems  of  law  governing  bills  of  exchange — 
what  we  may  call  the  Anglo-Saxon  system  and  the  system  of  the 
uniform  law.  Had  that  law  been  in  force  to  a  considerable  extent 
the  difficulties  caused  at  the  outbreak  of  the  European  war  would 
have  been  mitigated. 

I  do  not  say,  of  course,  that  the  uncertainty  which  occurred  in 
regard  to  financial  operations  would  have  been  entirely  removed. 
But  that  uniform  law  dealt  with  the  very  question  of  the  mora- 
torium, which  has  excited  so  much  attention  all  over  Latin  America, 
as  well  as  in  Europe  and  in  this  country.  It  provided  that  for  thirty 
days  the  right  of  the  holder  of  a  bill  should  be  suspended  without 
impairing  his  claims  against  the  indorsers,  and  at  the  end  of  thirty 
days  some  other  steps  should  be  taken,  until  finally  the  entire  question 
of  settlement  of  bills  should  be  adjusted  in  an  orderly,  simple,  and 
legal  manner.  Unfortunately,  very  few,  if  any,  of  the  powers  had  rati- 
fied the  action  of  their  delegates  at  The  Hague  in  the  adoption  of  this 
law,  so  that  we  were  unable  to  test  its  efficacy  as  we  could  have  done 
had  the  conference  been  held  a  few  years  earlier  and  the  uniform  law 


214  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

of  bills  been  generally  recognized  and  in  force  among  the  nations 
of  the  world. 

But  I  sincerely  hope  and  believe  it  will  prove  to  be  the  case  that 
the  standing  committee  on  this  subject  will  take  up  that  subject  and 
will  examine  the  uniform  draft  adopted  at  The  Hague  and  will 
endeavor  to  bring  about  complete  harmony  of  action,  so  far  as  pos- 
sible, between  the  powers  of  the  Western  Hemisphere.  If  the  United 
States  finds  itself  unable  to  accept  in  full  the  terms  of  the  uniform 
law,  it  will  still  be  true  that  we  shall  reduce  to  two  systems  instead  of 
twenty  the  laws  now  governing  the  bill  of  exchange  on  the  American 
Continents.  More  than  that,  it  was  freely  admitted  at  that  confer- 
ence at  The  Hague  by  the  French  delegates  themselves  and  other 
important  countries  that  the  Anglo-Saxon  system  was  in  many 
respects  the  simpler  and  better  and  that  they  would  gladly  adopt  it, 
but  they  could  not  under  their  system  of  law  come  all  the  way  at  the 
beginning.  So  that  if  the  United  States  should  fail  to  agree  to  a 
draft  which  was  acceptable  to  Latin  countries,  it  would  by  no  means 
imply  a  lack  of  harmony  in  carrying  out  the  principles  of  uniformity, 
but  only  that  we  were  working  by  gradual  approaches  that  the  dif- 
ferences between  the  common  law  and  the  civil  law  could  be  smoothed 
away. 

Practically  all  that  I  have  said  regarding  bills  of  exchange  ap- 
plies to  uniform  law  of  checks,  except  that  at  the  Second  Hague  Con- 
ference  only  a  preliminary  draft  of  the  law  of  checks  was  prepared 
for  submission  to  the  powers,  and  the  final  protocol  was  postponed 
to  a  future  conference,  which  we  may  devoutly  hope  will  be  held 
soon  after  the  rise  of  the  dove  of  peace  above  the  disturbed  coun- 
tries of  Europe.  But  there  is  no  reason  why  we  should  not  proceed 
to  adopt  a  uniform  law  of  checks  to  meet  our  own  requirements 
without  waiting  for  the  countries  at  war  to  become  parties  to  it. 

The  same  principle  would  apply  to  a  law  of  warehouse  receipts — • 
giving  a  more  highly  negotiable  character  to  the  warehouse  receipt 
and  throwing  about  it  the  proper  safeguard  to  insure  its  negotiability 
and  marketability ;  and  so  on  with  respect  to  similar  topics,  which  I 
believe  are  under  careful  consideration  by  the  committee  which  it  was 
the  happy  thought  of  your  presiding  officer  to  appoint  to  carry  out 
the  work  of  this  convention. 

In  respect  to  the  monetary  reform,  with  which  I  have  perhaps  a 
peculiar  association  and  interest,  I  believe  that  this  committee  should 
not  ignore  that  subject.  It  is  a  subject,  however,  requiring  care, 
delicacy,  and  tact  in  its  consideration.  I  am  not  myself  a  believer 
in  the  early  adoption  of  a  uniform  monetary  system  or  uniform 
coinage.  Uniformity  in  standard,  of  course,  is  highly  desirable,  but 
uniformity  of  unit  can  not  be  obtained  without  very  careful  con- 
sideration of  the  question  of  standard  of  wages  and  prices  in  each 


PROCEEDINGS.  .        215 

country.  Where  a  unit  in  a  country  is  an  easy  multiple  of  that  of 
the  United  States,  some  progress  may  be  made  toward  better  and 
closer  adaptation  of  the  unit  of  other  countries  to  that  of  the  United 
States.  Already,  as  we  know,  two  countries  have  adopted  the 
American  unit — Nicaragua,  by  her  law  of  March  20,  1912,  and  Cuba 
by  the  law  of  economic  defense  of  the  29th  of  October  of  last  year. 
But  it  so  happened  that  they  were  in  a  situation  in  the  one  case 
where  a  new  unit  was  an  easy  multiple  of  the  depreciated  exchange 
unit,  and  in  the  other  case  where  the  gradual  improvement  in  ex- 
change had  made  the  currency  already  in  use  practically  correspond 
to  the  American  dollar. 

I  believe  that  the  subject  should  be  carefully  studied,  and  that  it 
should  be  studied  with  reference — and  with  careful  reference — to  the 
national  feeling  and  the  national  economic  interests  of  all  of  the 
countries  involved,  and  not  with  the  attempt  to  run  into  a  single 
groove  or  to  impose  a  rigid  mode  of  system  of  exchange,  which 
may  not  be  adapted  to  our  American  unit. 

To  that  end  I  have  proposed  a  scheme,  not  very  ambitious,  but 
merely  to  bring  the  subject  before  the  permanent  committee,  and  I 
will  read  it.  I  go  too  far  in  referring  to  it  as  a  scheme ;  I  mean  I  have 
prepared  a  suggestion  to  this  effect : 

That  the  permanent  committee  on  uniform  laws  be  authorized  to  study  the 
best  means  of  facilitating  remittances  of  money  and  of  credit  instruments  be- 
tween American  countries,  and  such  approach  to  stability  or  uniformity  as  may 
be  practicable  in  their  monetary  systems,  with  due  regard  to  their  national 
economic  interests,  and  to  this  end  said  committee  is  authorized  in  its  dis- 
cretion to  appoint  subcommittees,  employ  experts,  and  make  recommendations 
to  the  various  countries  represented. 

I  will  simply  ask  that  that  be  referred  to  the  general  committee  on 
that  subject  without  any  recommendation,  simply  for  such  consider- 
ation as  they  may  see  fit  to  give  it. 

One  other  suggestion  was  made  here  which  impressed  me  very 
favorably,  and  that  was  the  creating  of  an  international  tribunal  to 
deal  with  the  question  of  uniform  laws.  If  we  are  to  have  a  uniform 
law  of  bills  of  exchange  or  a  uniform  law  of  checks  and  a  uniform 
law  of  warehouse  receipts,  and  so  on,  with  other  commercial  subjects, 
then  it  is  of  the  very  highest  importance  that  that  law  should  be  uni- 
formly interpreted.  Otherwise  it  will  soon  cease  to  be  uniform  by 
reason  of  the  diverse  interpretation  of  the  tribunals  of  different  coun- 
tries. That  means  a  problem  involving  time  and  deliberation,  be- 
cause, as  it  developed  at  The  Hague,  when  the  subject  was  broached 
there,  it  was  not  within  the  constitutional  power  of  some  govern- 
ments under  their  present  governing  systems  to  waive  the  declaration 
that  the  decisions  of  their  supreme  court  are  the  supreme  law  of  the 
land.  But  I  consider  that  in  this  case  for  a  court  or  the  supreme 


216  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

tribunal  to  decide  purely  economic  differences  to  be  a  technical  diffi- 
culty and  not  a  moral  or  practical  difficulty.  In  other  words,  if  it 
develops  that  an  international  tribunal  is  the  best  means  of  securing 
uniformity  of  commercial  law  and  practice  to  the  Western  Hemis- 
phere, then  I  believe  these  countries  will  be  willing,  by  constitutional 
amendment  or  otherwise,  to  meet  the  requirements  of  the  situation. 
At  the  Hague  Conference,  with  respect  to  bills  of  exchange,  a  very 
similar  proposition  was  made  by  a  German  delegate — a  man  of  great 
ability  and  breadth  of  view — that  the  conference  should  express  the 
wish  to  their  several  governments  that  they  take  under  consideration 
the  subject  of  an  international  tribunal  to  decide  these  questions  of 
commercial  law;  and,  mind  you,  this  proposition  -is  very  different 
and  not  much  more  concrete,  and  I  may  say  more  practicable,  and 
involves  many  less  difficulties,  than  those  proposals  which  have  been 
made  for  an  international  tribunal  to  deal  with  political  or  diplo- 
matic questions.  There  can  be  no  political  or  diplomatic  objection 
to  the  determination  of  private  differences — differences  almost  exclu- 
sively private  and  not  political  and  diplomatic — as  to  the  meaning  of 
certain  provisions  regarding  bills  of  exchange  or  as  to  questions 
arising  under  them.  Therefore,  while  the  objective  is  probably  at  the 
end  of  a  long  road  of  deliberation,  consideration,  and  comparison 
of  views,  I  believe  the  time  will  come  when  it  will  be  practicable 
to  establish  an  international  tribunal  which  shall  reconcile  all  of  these 
purely  technical  business  questions  between  the  citizens  of  the  West- 
ern Hemisphere,  and,  let  us  hope,  eventually  between  the  citizens  of 
the  world.  [Applause.] 

Secretary  McADoo.  I  shall  now  call  upon  Mr.  Herbert  R.  Eldridge, 
of  New  York,  to  whom  I  have  allotted  fifteen  minutes.  Mr.  Eldridge 
is  vice  president  of  the  National  City  Bank.  When  he  has  finished  I 
shall  call  upon  Mr.  J.  J.  Arnold,  of  Chicago,  to  whom  I  shall  allot  a 
similar  amount  of  time. 

Mr.  H.  E.  ELDRIDGE  (of  New  York) : 

MR.  SECRETARY,  LADIES,  AND  GENTLEMEN. — It  has  been  only  in 
recent  years  that  the  United  States  has  gained  recognition  as  a  large 
exporter  of  manufactured  products.  Since  the  close  of  the  Civil  War 
the  energies  of  our  people  have  been  devoted  largely  to  the  develop- 
ment of  our  own  country,  and  one  has  only  to  travel  the  length  and 
breadth  of  the  land  to  see  to  what  good  purpose  those  energies  have 
been  directed.  Such  export  trade  as  we  possessed  was,  until  recently, 
the  result  of  the  sale  of  our  surplus  inv  material  and  food,  products 
and  such  manufactured  articles  as  the  skill  and  ingenuity  of  our  peo- 
ple permitted  us  to  produce  to  better  advantage  than  others.  During 
the  past  fifteen  years  the  attention  of  our  business  men  has  been  called 


PROCEEDINGS.  217 

to  the  gradually  changing  economic  position  of  our  country,  which 
demonstrated  clearly  that  an  increasingly  larger  proportion  of  our 
food  products  was  being  consumed  by  our  growing  population  and 
that  our  own  demand  for  manufactured  goods  was  causing  more  and 
more  attention  to  be  paid  to  that  line  of  endeavor,  thus  bringing 
about  a  more  rapid  growth  of  the  cities  and  a  consequent  further 
drain  on  our  heretofore  large  surplus  of  food  products.  With  char- 
acteristic energy,  our  people  have  devoted  more  and  more  attention 
to  manufacturing  and  have  been  able  not  only,  in  large  measure,  to 
meet  the  increased  home  demand,  but  to  more  than  offset  the  dimin- 
ishing exportable  supply  of  foodstuffs  by  the  sale  of  certain  manu- 
factured articles  which  we  can  produce  advantageously  and  which 
have  found  favor  abroad. 

It  has,  however,  gradually  become  plain  that  if  we  are  to  take 
our  proper  position  among  the  manufacturing  nations  of  the  world 
we  must  devote  a  fuller  measure  of  thought  to  the  development 
of  the  machinery  so  necessary  to  secure  in  the  markets  of  the 
world  our  proper  proportion  of  that  business.  To  the  casual  mind 
such  an  ambition  might  seem  easy  of  accomplishment,  but  a  care- 
ful study  of  the  fundamental  principles  of  foreign  trade  puts 
before  us  clearly  the  difficulties  in  the  way.  We  find  ourselves  in 
active  competition  with  many  great  nations  which  have  devoted 
years  of  study  to  the  subject  and  whose  success  has  only  been 
attained  by  the  active  cooperation  of  their  Governments,  manufac- 
turers, business  men,  investors,  and  financiers.  We  observe  that 
those  nations  have  encouraged  the  building  and  operation  of  mer- 
cantile marines,  have  given  official  sanction  to  proper  combinations 
of  manufacturers  for  the  promotion  of  the  economical  sale  of  their 
goods  abroad,  have  looked  with  favor  upon  the  establishment  of 
banks  in  foreign  countries,  and  have  supported  and  encouraged 
investments  on  the  part  of  their  citizens  in  foreign  securities,  as  well 
as  their  participation  in  enterprises  tending  to  promote  the  economic 
growth  and  trade  development  of  other  countries. 

An  increase  of  trade  between  two  countries  naturally  brings  about 
a  mutually  better  understanding  of  the  resources  and  abilities  of 
each.  It  is  proper,  and  it  invariably  follows,  that  with  the  growth  of 
such  trade  the  desire  becomes  reciprocal  to  buy  the  one  from  the 
other  when  it  can  properly  be  done,  and  especially  so  if  resultant 
balances  are  often  adjusted  by  the  purchase  of  securities  rather  than 
the  shipment  of  gold.  If  a  country  is  in  the  enjoyment  of  active 
business  relations  with  another  it  would  be  shortsighted  indeed 
should  it  fail  to  extend  to  such  a  desirable  customer  every  legitimate 
opportunity  to  increase  its  purchasing  capacity,  and  this  can  best  be 
done  by  aiding  and  stimulating  its  industries  and  participating  in 


218  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

the  development  of  its  natural  resources.  Such  projects,  when  chosen 
with  good  judgment,  usually  prove  successful,  and  the  securities 
based  thereon  become  well  known  and  enjoy  high  standing  among 
investors.  Until  last  year  the  manufacturing  export  trade  of  the 
United  States  had  not  reached  the  proportions  that  made  it  necessary 
for  her  citizens  to  give  serious  thought  to  this  phase  of  foreign  trade, 
but  since  the  outbreak  of  the  deplorable  war  now  raging  in  Europe 
it  has  become  more  and  more  apparent  that  if  we  are  to  dispose  of 
a  large  volume  of  our  products  to  foreign  countries  we  must  show  a 
willingness  to  take  in  part  payment  therefor  some  portion  of  such 
securities  as  in  our  judgment  constitute  safe  investments.  The  rea- 
son for  this  is  not  difficult  to  explain,  because  so  long  as  the  balance 
of  trade  runs  heavily  against  the  purchasing  country  it  makes  the 
sale  of  securities  or  the  shipment  of  gold  necessary,  and  if  gold  be 
insisted  upon  the  purchasing  power  of  the  customer  is  seriously  im- 
paired. It  is  interesting  to  note  that  since  the  outbreak  of  the  war 
and  the  accumulation  of  a  large  trade  balance  in  our  favor,  conse- 
quent to  our  increasing  volume  of  exports,  we  have  not  only  repur- 
chased from  Europe  millions  of  American  securities  formerly  held 
by  her  banks  and  investors,  but  have  bought  some  of  her  newly  issued 
securities.  History  shows  that  nations  exporting  manufactured 
goods  in  large  volume  become  large  investors,  and  there  is  good  reason 
to  believe  that  as  the  manufacturing  export  trade  of  the  United 
States  increases  and  closer  attention  is  paid  to  the  needs  of  foreign 
markets  the  attitude  of  our  bankers  and  the  investing  public  will 
become  favorable  to  such  sound  securities  as  may  from  time  to  time 
be  offered. 

One  of  the  prime  essentials  to  the  wise  development  of  foreign 
trade  is  the  proper  provision  for  the  economical,  efficacious  and 
prompt  interchange  of  all  credit  transactions  between  countries  trad- 
ing with  one  another.  The  bill  of  exchange  is  and  has  been  for  years 
the  medium  through  which  all  commercial  transactions  between  na- 
tions have  been  handled.  The  evolution  of  the  bill  of  exchange  to 
its  present  essential  place  among  trade  documents  is  most  interesting, 
and  did  time  permit  it  would  be  well  worth  while  to  trace  its  de- 
velopment and  the  many  uses  to  which  it  is  put.  Suffice  it  to  say  that 
the  establishment  of  banks  in  all  the  principal  trading  centers  of  the 
world  has  given  to  the  bill  of  exchange  a  market  commanding  most 
favorable  rates  of  discount.  Great  Britain,  France,  and  Germany 
long  ago  learned  the  value  of  banks  in  foreign  trading  centers  favor- 
ably disposed  to  their  bills,  and  in  nearly  every  quarter  of  the  globe 
are  to  be  found  such  institutions  dominated  by  influences  favorable  to 
them.  Especially  is  this  true  of  Great  Britain,  the  first  great  nation 
to  realize  the  value  of  foreign  trade,  whose  wise  development  of  the 


PROCEEDINGS.  219 

bill  of  exchange  gave  to  London  its  predominant  position  as  a  money 
center  and  made  it  the  clearing  house  for  the  trade  of  the  world. 
Italy,  Spain,  Holland,  Switzerland,  Belgium,  and  other  European 
nations  have  their  banks  and  agencies  abroad,  thus  giving  to  all  those 
countries  assurances  that  bills  drawn  on  their  banks  and  merchants 
will  be  given  due  honor,  not  to  speak  of  the  inestimable  value  of  these 
branches  in  enhancing  the  ability  of  exporters  to  do  business  abroad 
by  giving  them  full  knowledge  of  fundamental  and  general  condi- 
tions prevailing  in  trade  centers  and  credit  advice.  It  is  quite  clear 
that  if  the  dollar  bill  of  exchange,  in  which  we  in  the  United  States 
are  so  interested,  is  to  take  its  proper  place  among  the  trade  instru- 
ments of  the  world,  facilities  must  be  provided  for  its  prompt  and 
satisfactory  negotiation  wherever  its  circulation  is  of  importance  to 
our  trade. 

We  can  not  expect  the  dollar  bill  of  exchange  to  be  handled  on  as 
favorable  bases  as  those  of  our  competitors  so  long  as  the  business 
must  be  transacted  through  banks  controlled  by  competitive  agencies. 
Until  recently  practically  all  the  purchases  made  by  American  im- 
porters from  Central  and  South  American  countries  were  through 
the  medium  of  bills  of  exchange  drawn  on  London  and  practically 
all  settlements  made  for  the  exports  of  our  manufacturers  to  the  im- 
porters of  Central  and  South  America  were  paid  for  by  means  of 
sight  and  time  drafts  drawn  on  London.  There  are  few  portions  of 
the  entire  world  where  the  British  banker  is  not  represented,  either 
by  branch  banks  or  banks  organized  under  British  influence.  Lon- 
don has,  through  the  perfection  of  its  discount  market  and  a  marvelous 
banking  system,  created  a  tremendous  banking  power  and  an  ideal 
credit  system. 

By  reason  of  its  commanding  position  as  the  clearing  center  of  the 
trade  of  the  world  it  became  of  first  importance  that  the  banks  of 
other  countries  handling  bills  created  by  foreign  commerce  and  trade 
and  granting  credits  against  which  bills  were  drawn  payable  in  Lon- 
don should  place  themselves  in  close  touch  with  that  market  by  means 
of  accounts  opened  and  balances  maintained  with  existing  banks  or 
establishing  agencies  in  London.  So  long  as  the  greater  portion  of 
the  trade  settlements  of  the  world  are  consummated  through  the 
medium  of  sterling  bills  it  is  inevitable  that  the  demand  for  such 
bills  will  never  fail  and  that  the  rates  at  which  they  are  taken  on 
the  London  discount  market  will  be  the  controlling  factors  in  regu- 
lating the  rates  at  which  all  bills  drawn  in  sterling  or  otherwise  are 
taken.  London's  position  as  the  clearing-house  center  of  the  trade 
of  the  world  made  it  the  market  on  which  has  been  floated  the  bills 
of  exchange  representing  the  trade  of  the  world,  thus  giving  it  a 
preponderating  advantage  and  enabling  it  by  means  of  the  simple 
process  of  raising  or  lowering  its  discount  rate  to  direct  the  move- 


220  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

ment  of  gold  and  credit  toward  or  from  that  market,  thus  inviting 
and  invariably  receiving  any  assistance  or  support  needed  when  the 
volume  of  bills  offered  for  discount  assumed  proportions  threatening 
gold  exports  to  the  extent  of  unduly  lowering  its  reserves  or  discourag- 
ing the  employment  of  foreign  funds  or  credits  on  its  market  when 
its  own  supply  was  sufficient  to  care  for  the  demand. 

Again,  the  liberal  investments  made  by  the  English  people  in  the 
securities  of  other  countries  has  created  a  still  further  demand  for 
London  exchange  to  settle  interest  and  principal  obligations.  A  bill 
drawn  on  a  London  firm  or  bank  of  high  standing  is  always  discount- 
able in  every  market  at  the  lowest  prevailing  rates,  and  naturally  a 
bill  drawn  on  London  has  come  to  be  regarded  as  the  most  desirable 
form  of  bill  in  existence.  The  result  has  been  that  the  market  quota- 
tion for  the  London  bill  has  been  made  as  fine  as  it  well  could  be  and 
the  bill  has  commanded  a  premium  over  that  drawn  on  any  other 
center.  In  fact,  until  the  recent  outbreak  of  hostilities  the  rates  for 
bills  on  all  other  countries  were  invariably  governed  by  the  quota- 
tions for  sterling.  It  is  small  wonder,  then,  that  when  war  was  de- 
clared and  the  delicate  machinery  of  the  market  where  the  trade  set- 
tlements of  the  world  were  effected  was  suddenly  thrown  out  of  com- 
mission consternation  should  have  been  felt  and  chaos  should  have 
reigned  for  a  time  in  every  center.  The  result  could  not  have  been 
other  than  it  was.  We  had  made  the  mistake  of  placing  too  much 
dependence  on  one  center. 

Before  any  facilities  were  offered  for  the  purchase  of  bills  drawn 
on  the  United  States  in  Central  and  South  America  such  bills  were 
subject  to  a  discount  from  the  London  rate  of  from  1  per  cent  to 
2  per  cent,  and  sometimes  even  more,  for  the  reason  that  we  did  not 
have  the  facilities  for  the  prompt  sale  of  such  bills  on  a  discount 
market  in  this  country,  nor  was  the  need  of  creating  or  of  main- 
taining balances  in  this  country  apparent  to  bankers  abroad.  Our 
laws  formerly  did  not  permit  national  banks  to  accept  drafts,  whether 
drawn  against  the  shipments  of  goods  from  one  country  to  the  other 
or  otherwise.  With  few  exceptions,  State  banks  were  prohibited 
from  making  such  acceptances.  The  result  was  that  only  bills 
drawn  on  firms  were  offered,  and  the  high  rate  that  the  negotiators 
were  compelled  to  pay  in  order  to  effect  their  sale  made  it  far  more 
economical  and  desirable  for  the  importer  to  arrange  either  directly 
or  through  his  banker  for  the  opening  of  a  credit  with  some  re- 
sponsible London  bank  or  acceptance  house.  As  a  consequence,  prac- 
tically all  the  business  created  by  the  large  importations  of  this  coun- 
try was  handled  through  the  medium  of  bills  drawn  on  and  financed 
in  London.  The  dollar  bill  of  exchange  was  virtually  unknown. 

The  tribute  thus  paid  to  our  banking  friends  abroad  in  the  estab- 
lishment of  credits  of  this  nature  and  the  financing  of  the  bills  of 


PROCEEDINGS.  221 

exchange  drawn  thereunder  has  been  an  absolute  loss  to  us  and  a 
source  of  great  profit  to  them.  So  long  as  our  banking  laws  re- 
mained as  they  were  it  was  impossible  for  our  bankers  to  afford  the 
relief  they  should  or  establish  the  facilities  necessary  to  bring  about 
a  change.  Until  the  passage  of  the  Federal  Reserve  Act  the  laws 
governing  banking  throughout  the  United  States  did  not  give  to  the 
country  the  ability  to  extend  credit  that  our  resources  and  banking 
strength  warranted.  The  Federal  Reserve  Act  marked  the  greatest 
step  forward  ever  made  in  the  financial  progress  of  the  United 
States,  and  will  result  in  vastly  increasing  the  importance  of  our 
country  as  a  world  money  center.  One  of  the  prime  necessities  in 
the  creation  of  an  important  money  center  is  an  established  dis- 
count market,  a  market  wherein  may  be  sold  at  the  lowest  rate  all 
bills  drawn  and  accepted  by  houses  and  banks  of  high  credit  standing. 

The  Federal  Reserve  Act  permitted  member  banks  to  accept  to 
the  extent  of  50  per  cent  of  their  capital  and  unimpaired  surplus  all 
bills  involving  the  importation  and  exportation  of  goods.  A  sub- 
sequent amendment  permits  an  additional  50  per  cent,  subject  to  the 
approval  of  the  Federal  Reserve  Board.  To-day  in  our  various 
money  centers  all  such  bills  accepted  by  responsible  banking  houses 
and  firms  command  a  rate  heretofore  unknown,  for  the  reason  that 
they  constitute  the  highest  and  most  desirable  form  of  credit  offered 
in  the  shape  of  short-term  obligations  and  are  eagerly  sought  by 
bankers  and  investors  desiring  temporary  and  liquid  investments. 
Such  bills  can  be  bought  or  sold  at  will,  and  while  practically  all  of 
them  are  carried  by  their  purchasers  until  maturity,  they  are  car- 
ried with  the  comfortable  feeling  that  under  any  conditions  that 
may  arise  they  are  either  through  the  medium  of  our  discount  mar- 
ket or  by  rediscounting  with  a  Federal  reserve  bank  instantly  con- 
vertible into  money  or  bank  credits. 

There  has  already  sprung  up  in  our  country  a  very  good  market 
for  acceptances  of  this  nature,  but  the  volume  offered  is  not  of  the 
magnitude  it  should  be,  nor  does  it  make  the  market  as  elastic  as 
desired.  Indeed,  were  we  able  to  attract  the  bills  drawn  against  all 
our  imports  the  volume  would  not  be  sufficient  to  establish  a  market 
of  the  breadth  and  magnitude  we  are  amply  able  to  support.  We 
may  therefore  feel  that  we  can,  in  safety  and  with  the  assurance  of 
a  good  market,  look  forward  to  the  financing  of  certain  portions  of 
our  export  trade,  and  even  to  the  creation  of  dollar  acceptances  to 
finance  trade  between  other  countries  than  our  own.  Experience  will 
no  doubt  teach  us  that  the  acceptance  privilege  accorded  member 
banks,  and  its  use  indulged  in  by  duly  authorized  State  banks,  as  well 
as  private  bankers,  strong  acceptance  houses,  and  importers  of  high 
credit  standing  will  prove  a  distinct  benefit  in  the  furtherance  of 
foreign  trade  and  permit  us  to  be  of  great  assistance  in  the  develop- 


222  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

ment  of  the  natural  resources  of  those  countries  which  may  honor  us 
with  a  liberal  proportion  of  their  trade. 

It  is  highly  desirable  that  the  dollar  bill  of  exchange  should  be 
given  every  possible  opportunity  to  enjoy  the  standing  which  it  ought 
to  have,  and  the  best  way  for  this  to  be  accomplished  is  to  provide 
facilities  abroad  for  the  prompt  negotiation  of  all  bills  drawn  upon 
substantial  United  States  banks  and  importing  houses. 

It  is  obvious  that  if  against  credits  opened  in  this  country  facilities 
are  provided  whereby  a  foreign  exporter  is  enabled,  in  the  money 
center  of  his  own  country,  to  negotiate  bills  drawn  against  the  United 
States  banks  and  houses  on  a  basis  equally  as  favorable  as  he  could 
negotiate  bills  of  exchange  drawn  on  London  or  any  other  money 
center,  it  will  be  agreeable  to  him  to  handle  his  transactions  with  the 
merchants  of  this  country  in  that  manner,  and  thus  we  can  attract  to 
the  United  States  all  such  bills  of  exchange  and  give  to  our  bankers 
the  opportunity  to  finance  this  immense  volume  of  highly  desirable 
business,  instead  of  permitting  it  to  go  to  bankers  abroad  as  here- 
tofore. 

Under  the  provisions  of  the  Federal  Reserve  Act  member  banks 
having  a  capital  and  surplus  of  $1,000,000  or  more  are  per- 
mitted to  establish  branches  abroad,  and  if  advantage  is  taken  of 
this  privilege  it  is  manifest  that  in  the  course  of  time  our  bankers 
will  be  able  to  provide  markets  at  the  point  of  origin  for  practically 
all  dollar  bills  of  exchange  that  may  be  drawn,  and  likewise  afford 
our  foreign  customers  every  facility  for  the  handling  of  their  pur- 
chases from  us.  Branches  so  established  will  be  in  position  to  pur- 
chase bills  drawn  in  dollars  on  the  proper  basis  and  give  to  such 
bills  the  respect  to  which  they  are  entitled  and,  by  encouraging  their 
use,  greatly  stimulate  the  business  of  this  country  with  our  foreign 
friends.  Branch  banking  is  a  new  field  to  the  commercial  bankers 
of  the  United  States,  and  for  a  time  must  go  through  what  may  be 
termed  an  experimental  stage.  To  achieve  the  best  results  and  pro- 
mote the  rapid  expansion  of  our  foreign  trade  the  establishment  of 
branch  banks  abroad  should  be  done  more  with  an  eye  to  the  advan- 
tages accruing  to  trade  than  to  profits  for  the  branches,  for  to  do  the 
work  effectively  and  well  such  branches  for  a  few  years  to  come  must 
assume,  at  considerable  expense  to  themselves,  the  roles  of  informa- 
tion bureaus  as  well  as  banks,  and  not  only  must  they  be  prepared  to 
assist  the  exporters  of  the  United  States  in  every  way  possible,  but 
they  must  be  able  competently  to  advise  the  exporters  of  the  countries 
in  which  they  are  located,  of  possible  markets  in  the  United  States. 
They  must  be  equipped  and  have  the  disposition  to  advise  recipro- 
cally in  the  matter  of  trade  opportunities  and  credits  and  be  imbued 
with  a  sincere  desire  to  serve  the  interests  of  the  country  in  which 
they  are  located,  so  far  as  lies  within  their  power.  They  should 


PROCEEDINGS.  223 

advise  the  home  office  of  such  openings  as  may  occur  for  the  profit- 
able investment  of  funds  in  enterprises  of  merit,  in  order  that  the 
information  may  be  disseminated  to  all  who  are  interested,  and 
should  report  all  anticipated  public  issues  of  securities.  Our  people 
have  for  so  many  years  found  the  natural  resources  and  rapid  devel- 
opment of  this  country  afforded  such  desirable  opportunities  for  in- 
vestment that  little  attention  has  been  paid  to  foreign  securities.  It  is 
now  believed,  however,  that  a  better  understanding  not  only  of  their 
desirability  but  the  wisdom  of  making  such  investments  will  become 
increasingly  apparent.  In  furtherance  of  this,  branch  banks  will 
surely  prove  most  beneficial. 

There  is  good  reason  to  believe  that  by  virtue  of  the  establishment 
of  an  effective  and  intelligent  branch  banking  system  in  many  foreign 
countries  and  a  broad  discount  market  at  home  we  will  be  able  to 
attract  a  much  larger  share  of  the  world's  banking  business  than 
many  wrould  have  thought  possible. 

In  order  that  our  present  financial  position  as  compared  with 
former  years  may  be  better  understood  it  is  proper  to  say  that  for 
many  years  the  bankers  of  our  country  were  unable,  by  reason  of  the 
legal  restrictions  surrounding  them,  to  extend  to  the  business  in- 
terests and  the  country  at  large  the  banking  facilities  to  which  they 
were  entitled.  Notwithstanding  our  national  wealth  and  stock  of 
gold  exceeded  that  of  any  nation  of  earth,  we  more  than  once  found 
ourselves  sadly  embarrassed  to  care  for  our  needs  and  forced  to  lean 
upon  the  more  highly  developed  systems  of  banking  abroad.  It 
would  be  difficult  indeed  to  calculate  in  dollars  and  cents  the  losses 
occasioned  by  the  recurring  panics  to  which  we  were  subject  or  to 
compute  the  years  we  have  lost  in  our  march  of  progress.  The 
bankers  of  the  United  States  were  more  than  pleased  with  the 
passage  of  the  Federal  Keserve  Act,  which  went  into  effect  in  Novem- 
ber 1914.  They  are  keenly  alive  to  the  far  more  favorable  position 
they  now  occupy  to  be  of  assistance  in  developing  not  only  the 
resources  of  our  own  country  but  in  lending  a  helping  hand  wherever 
they  properly  can  to  the  commerce  of  the  world.  Even  yet  many  of 
them  do  not  fully  appreciate  the  extent  to  which  their  power  to 
serve  the  public  has  been  augumented  nor  the  full  measure  of  the 
benefit  arising  from  their  ability  to  present  a  solid  front  to  adversity. 
The  Federal  Reserve  Act  does  not,  perhaps,  go  as  far  as  it  should  in 
the  perfection  of  our  financial  machinery,  and  the  further  amend- 
ments experience  shows  to  be  necessary  will  doubtless  be  made,  yet 
it  marks  a  step  forward  in  our  financial  independence,  the  length  of 
which  time  alone  will  show.  For  the  first  time  in  our  history  we  are 
able  to  take  advantage  of  our  great  wealth,  large  stock  of  gold,  and 
credit-expansion  power  in  an  entirely  safe,  proper,  and  scientific 
manner. 


224  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

The  bankers  of  the  United  States  will  surely  do  all  they  can  to 
further  our  export  and  import  trade  and  do  their  part  to  make  the 
dollar  bill  of  exchange  favorably  known  so  that  it  will  command 
respect  among  the  trade  instruments  of  the  world,  nor  will  they  be 
found  lacking  in  doing  what  they  can  to  promote  the  material  pros- 
perity of  the  various  countries  in  which  they  establish  branches. 

In  seeking  to  extend  our  relations  abroad  it  is  but  natural  our 
eyes  should  turn  to  our  neighbors,  the  nations  of  Central  and  South 
America.  We  know  that  we  need  their  kindly  interest,  and  we  feel 
that  we  can  be  useful  to  them.  Therefore  a  meeting  of  this  nature, 
the  bringing  together  of  their  representative  men  with  those  of  our 
own  country  can  not  be  otherwise  than  beneficial,  for  it  is  quite  clear 
that  we  have  a  community  of  interest  that  can  be  best  served  by  a  full, 
frank,  and  free  discussion  of  our  mutual  needs  and  the  formulating 
of  plans  to  bring  about  the  desired  results  along  lines  of  equal  ad- 
vantage and  reciprocal  helpfulness.  [Applause.] 

Secretary  McADOO.  I  now  take  pleasure  in  calling  on  Mr.  J.  J. 
Arnold. 

Mr.  J.  J.  ARNOLD  (of  Chicago) : 

WORTHY  GUESTS  OF  OUR  NATION,  MR.  SECRETARY,  LADIES,  AND 
GENTLEMEN. — At  the  time  of  the  outbreak  of  the  European  war  I 
was  besieged  by  newspaper  men  who  were  anxious  to  know  what 
possible  benefits  might  or  would  accrue  to  the  United  States  of 
America  as  a  result  of  this  terrible  conflict.  At  the  time  I  was 
much  more  interested  and  concerned  with  possible  losses  and  dis- 
advantages rather  than  with  possible  or  probable  gain.  Upon  re- 
flection, however,  I  recognized  a  rift  in  the  clouds.  That  rift  was 
Latin  America  and  the  Orient.  There  are  a  few  in  our  country 
who  have  for  a  goodly  number  of  years  been  students  of  the  ques- 
tion of  trade  between  Latin  America  and  the  United  States,  and 
with  all  the  encouragement  that  could  be  given  by  a  compara- 
tively small  number  of  students  of  the  subject  very  little  impression 
was  made  upon  our  commercial  life  as  a  whole.  It  has  takea  a  great 
European  disturbance  to  emphasize  not  only  the  possibilities  but  also 
to  give  recognition  to  difficulties  in  the  way  of  developing  this  inter- 
course. It  is  most  gratifying  to  all  of  us  that  this  interest  has  found 
such  profound  expression  as  is  given  by  this  gathering. 

Although  some  have  long  ago  recognized  Latin  America  as  a  very 
promising  field,  it  would  appear  that  the  entire  Nation  now  believes 
that  the  territory  is  ready  for  harvest.  Now,  it  is  a  well-understood 
fact  by  those  who  are  familiar  with  the  principles  of  agriculture  that 
a  field  must  first  be  cultivated,  after  which  the  right  kind  of  seed 


PEOCEEDINGS.  225 

must  be.  sown,  and  this  in  turn  must  be  given  time  to  germinate  and 
grow  and  ripen  before  the  crop  can  be  garnered. 

Many  of  our  people,  and  more  particularly  our  newspapers,  were 
of  the  opinion  that  Europe  had  been  cultivating  the  soil,  sowing  the 
seed,  and  that  the  time  of  harvest  was  now  at  hand,  and,  inasmuch 
as  Europe  was  not  able  to  harvest  the  crop,  all  that  was  necessary 
for  us  to  do  was  to  step  in  and  reap  the  results  of  their  labors.  Such 
reasoning,  however,  left  out  of  consideration  the  one  important  fact 
that  practically  all  of  the  machinery  which  had  been  made  use  of 
for  the  production  of  the  harvest  had  upon  it  the  stamp  *;  made  in 
Europe  and  for  European  purposes."  I  have  reference  now  more 
particularly  to  the  selling  agencies,  established  direct  connections, 
and  banking  facilities.  While  it  is  undoubtedly  true  that  all  of  this 
machinery,  temporarily  interrupted  in  its  former  activities,  wrould 
be  perfectly  willing  to  serve  the  United  States  of  America,  it  is 
equally  true  that  in  all  probability  when  this  war  is  over  they  will 
naturally  revert  to  their  old  love.  It  is  my  candid  opinion  that  we  are 
now  moving  in  the  right  direction  and  along  sane  arid  sensible  lines. 

To  my  mind,  if  this  Conference  is  to  accomplish  anything  at  all,  it 
must  naturally  be  of  the  character  of  cultivating  the  territory  inter- 
ested, and  I  for  one  feel  that  our  nation,  as  well  as  the  countries  of 
Latin  America,  should  be  congratulated  upon  the  farsightedness  of 
our  Secretary  of  the  Treasury  in  calling  together  the  representative 
men  of  all  these  nations  for  such  a  purpose.  I  am  convinced  that  it 
is  one  of  the  biggest  Pan  American  thoughts  to  which  any  American 
statesman  has  ever  given  expression.  If  my  judgment  is  correct,  the 
attitude  of  mind  of  the  men  here  gathered  is  that  we  are  now  laying 
the  foundation  for  work  which  will  be  judged  by  its  results,  not  so 
much  in  the  immediate  future  as  in  twenty-five  years  from  now.  It 
appears  to  me  that  it  is  the  consensus  of  opinion  that  the  object  for 
which  we  are  working  is  to  build  sanely,  safely,  and  wisely  machinery 
for  the  carrying  on  of  commerce  between  our  nations  in  a  manner 
similar  to  that  which  has  proven  successful  on  the  part  of  the  Eu- 
ropean countries.  We  are  doing  pioneer  work,  and  pioneer  work 
is  always  done  with  an  eye  to  the  distant  future. 

From  the  standpoint  of  finance  there  is  no  question  in  the  minds 
of  those  conversant  with  the  situation  but  that  we  are  most  fortu- 
nately situated  at  the  present  time.  Mr.  Vanderlip  the  other  day, 
in  his  always  clear  and  able  manner,  emphasized  this  thought. 

In  my  humble  opinion  it  would  be  far  more  productive  of  good 
if  this  Nation  would  use  more  of  its  surplus  capital  for  constructive 
work  in  Latin  America  as  well  as  in  the  Orient  rather  than  to  lend 
our  credit  to  European  nations,  where  the  work  of  destruction  is 
thereby  furthered. 

98257°— 15 15 


226  PAN   AMEKICAN   FINANCIAL   CONFERENCE. 

Every  American  conversant  with  the  situation  is  proud  of  the 
work  which  Mr.  Vanderlip's  institution  has  already  accomplished  in 
Latin  America.  Such  a  work  can  be  done  only  by  the  larger  banks  of 
our  land.  We  believe,  however,  that  much  more  than  any  one 
institution  can  undertake  to  do  should  be  done.  There  are  banking 
institutions  throughout  our  land  interested  in  foreign  business  anx- 
ious to  cooperate  with  each  other  in  this  development.  Our  present 
banking  laws,  however,  do  not  permit  of  such  cooperation.  We  hope 
that  in  the  next  session  of  Congress  this  permission  will  be  granted. 
If  this  is  done,  then  any  group  of  banks,  or,  if  desired,  all  of  our 
banks  interested  in  foreign  trade,  could  cooperate  in  the  furnishing 
of  capital  and  banking  facilities  adequate  for  the  needs  of  every 
section  of  our  land. 

I  realize  that  the  question  of  finding  men  qualified  for  the  carry- 
ing on  of  such  work  is  of  great  importance  and  may  be  considered  a 
difficulty  in  the  way.  The  only  way  to  secure  men  is  to  train  them. 

I  am  not  advocating  a  development-  of  foreign  banking  facilities 
which  would  be  of  a  mushroom  growth,  but  the  same  should  be 
allowed  to  proceed  along  the  lines  of  normal  development.  This 
may  not  be  as  rapid  as  some  would  like,  but  I  am  confident  will 
respond  to  actual  requirements.  What  we  do  we  must  do  well  and 
in  a  way  which  will  make  a  favorable  impression  in  the  countries 
with  whom  we  are  seeking  to  do  business. 

Should  capital  of  such  countries  seek  to  cooperate  with  us  this 
should  be  made  possible.  In  this  way  such  an  institution  would 
become  cooperative  not  only  at  home  but  between  the  countries 
interested.  Such  an  organization  necessarily  should  have  broad 
powers  and  should  be  organized  with  the  thought  in  mind  not  only 
to  finance  exports  and  imports,  guaranteeing  payment  at  either  end, 
but  should  also  facilitate  the  financing  of  public  undertakings. 

In  our  country  we  have  been  advocating  a  fixed  foreign  policy' 
which  will  insure  protection  for  investments  made  by  us  in  foreign 
lands.  To  our  friends  from  Latin  America  I  would  like  to  say  that 
we  in  turn  feel  that  we  have  a  right  to  expect  and  demand  from  your 
countries  and  from  your  governments  every  possible  protection  which 
you  can  give  us. 

In  conclusion  I  would  like  to  emphasize  the  fact  that  while  we 
do  consider  Latin  America  a  field  worthy  of  our  attention,  it  is  not 
our  desire  to  apply  methods  of  exploitation,  and  we  believe  that,  on 
the  other  hand,  the  Latin-American  Republics  should  recognize  that 
the  United  States  of  America  also  is  a  field  which  you  in  turn 
should  seek  to  cultivate. 

Trade  between  two  countries  must  be  based  upon  an  exchange  of 
commodities  in  as  far  as  it  is  possible.  The  United  States  of 


PROCEEDINGS.  227 

America  is  rapidly  becoming  an  urban  instead  of  a  rural  country. 
This  is  why  we  are  now  seeking,  perhaps  as  never  before,  a  market 
for  our  manufactured  articles.  In  your  countries  the  reverse  is  still 
true,  and  on  this  account  your  natural  products  will  necessarily  be 
wanted  in  our  land  in  increasing  quantities. 

We  certainly  bid  you  welcome  as  guests  of  our  Nation,  and  we  are 
confident  that  as  we  cultivate  your  acquaintance  permanent  friend- 
ships are  bound  to  be  established.  This  quite  naturally  will  result 
in  a  greater  exchange  of  goods,  and  it  is  our  hope  that  our  commer- 
cial relations  will  soon  become  so  closely  interwoven  and  developed 
on  a  basis  which  will  make  impossible  in  this  hemisphere  what  we 
now  are  witnessing  in  Europe.  This  is  our  fondest  hope  and  sin- 
cerest  prayer.  [Applause.] 

MISCELLANEOUS  BUSINESS. 

Secretary  McAooo.  The  Committee  on  Uniformity  of  Laws  will 
meet  to-morrow  morning  at  11.30  o'clock  in  the  Columbus  Room  of 
this  building. 

The  Secretary-General,  Dr.  EOWE.  I  wish  to  inform  the  mem- 
bers of  the  Conference  that  if  they  so  desire,  automobiles  will  be 
here  to  take  them  to  the  Shoreham  to  pick  up  members  of  their 
parties  who  may  not  be  here,  and  will  then  proceed  to  the  Navy  Yard, 
or  they  may  go  direct  from  here  to  the  Navy  Yard,  as  they  prefer. 

Mr.  C.  A.  GREEN  (New  York) : 

GENTLEMEN  or  THE  CONFERENCE. — I  do  not  wish  to  take  more  than 
a  minute  of  your  time,  still  there  is  a  subject  that  I  think  is  worthy 
of  consideration  by  you  before  you  finally  adjourn.  Two  things  have 
been  called  to  my  attention,  as  matters  that  might  very  properly  come 
before  this  Conference. 

One  is  that  while  we  are  very  large  producers  of  silver,  yet  the 
market  for  silver  is  in  London.  For  example,  one  of  the  Latin- 
American  countries  not  long  ago  had  its  stock  of  silver  bullion  bear- 
ing the  mark  of  an  American  producer,  but  the  silver  instead  of  be- 
ing purchased  in  the  United  States  was  purchased  in  London.  The 
result  was  that  the  buyer  paid  two  commissions  and  extra  freight 
and  insurance.  He  purchased  in  London  because  it  was  the  financial 
center,  and  the  same  bankers  that  made  the  loan  sold  the  silver.  This 
ought  to  be  changed,  and  it  is  one  of  the  very  things  which  we  hope 
this  Financial  Conference  will  take  up. 

Secondly,  when  the  Latin- American  countries  want  silver  coinage 
they  go,  since  the  market  for  silver  is  in  London,  to  the  European 
mints;  naturally  to  Birmingham  or  Paris,  where  their  coinage  is 
made.  I  understand  that  we  have  authority  to  use  our  mints  for 


228  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

coinage  for  other  governments,  and  they  have  been  so  used  to  some 
extent,  as,  for  example,  in  the  case  of  Cuba.  Again,  since  we  are  large 
producers  of  silver,  why  can  not  our  mints  be  used  for  doing  the 
coinage  of  our  La  tin- American  friends?  It  would  save  them  ex- 
pense, it  would  keep  our  mints  operating,  and  would  thus  be  an  ad- 
vance toward  making  New  York  the  market  for  silver. 

Now,  gentlemen,  it  seems  to  me  that  before  the  final  adjournment 
of  this  Conference  this  subject  is  well  worthy  of  your  serious  con- 
sideration. I  leave  it  for  you  for  such  use  as  you  may  see  fit  to  make 
of  it.  [Applause.] 

Secretary  McADOO.  Gentlemen,  I  shall  put  Mr.  Charles  A.  Conant 
on  the  Committee  on  Uniformity  of  Laws. 

We  will  now  adjourn  until  3  o'clock  to-morrow  afternoon.  In  the 
meantime  the  Group  Committees  will  continue  their  work. 

(Thereupon  the  Conference  adjourned.) 


FIFTH  SESSION 


FRIDAY  AFTERNOON,  MAY  28.  1915 


229 


FIFTH  SESSION,  FRIDAY  AFTERNOON,  MAY  28. 


The  Conference  met  at  3  o'clock  p.  m. 

Secretary  McADOo:  Gentlemen,  before  we  begin  the  proceedings 
this  afternoon  I  desire  to  introduce  to  you  the  chairman  of  the 
Foreign  Kelations  Committee  of  the  House  of  Eepresentatives  of 
the  United  States,  the  Honorable  Henry  D.  Flood,  of  Virginia, 
through  whose  courtesy,  as  well  as  through  whose  assistance,  we  are 
much  indebted  for  the  action  of  Congress  in  passing  the  necessary 
resolution  authorizing  this  Conference.  I  want  him  to  say  a  few 
words  of  welcome  to  you.  [Applause.] 

Hon.  HENRY  D.  FLOOD  (of  Virginia) : 

MR.  McAooo  AND  GENTLEMEN  or  THE  PAN  AMERICAN  FINANCIAL 
CONGRESS. — I  gladly  avail  myself  of  this  opportunity  to  extend  on 
behalf  of  the  Congress  of  the  United  States  a  brief  word  of  welcome 
to  the  delegates  to  the  Pan  American  Financial  Congress  and  to 
assure  Secretary  McAdoo  and  the  Conference  that  I  believe  the  Con- 
gress of  the  United  States  will  do  all  in  its  power  to  carry  out  the 
results  of  your  deliberations  [applause]  and  will  do  whatever  is 
possible  to  enlarge  and  extend  the  financial  and  commercial  relations 
and  the  transportation  facilities  between  this  country  and  the  coun- 
tries of  Central  and  South  America. 

I  think  the  conception  of  Secretary  McAdoo  in  bringing  about 
this  Conference  was  a  great  stroke  of  statesmanship,  and  when  it 
was  first  broached  to  Congress  it  met,  with  few  exceptions,  the  instant 
and  hearty  approval  of  the  membership  of  that  body. 

My  admiration  for  the  people  and  my  faith  in  the  future  of  the 
countries  of  Central  and  South  America  are  daily  enhanced  since  I 
began  a  systematic  study,  with  the  aid  of  my  friend  and  your  friend, 
the  Honorable  John  Barrett,  of  the  history  and  possibilities  and  great- 
ness of  those  countries,  and  on  behalf  of  the  Congress  of  the  United 
States  I  extend  to  their  delegates  a  most  hearty  welcome.  Our  gates 
swing  open  to  receive  you.  Our  hearts  welcome  you.  And  our 
hope  is  that  you  may  at  least  get  a  small  fraction  of  the  pleasure  of 
being  with  us  that  we  receive  through  your  coming  here.  [Ap- 
plause.] 

231 


232  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

By  reason  of  the  position  which  I  occupy  in  the  legislative  body 
of  this  country  it  has  been  my  privilege  and  duty  to  be  sponsor  for 
much  of  the  legislation  in  relation  to  the  splendid  countries  to  the 
south  of  us.  I  took  pleasure  in  carrying  out  the  suggestion  of  the 
President  and  secured  an  act  of  Congress  authorizing  him  to  ac- 
credit an  ambassador  instead  of  a  minister  plenipotentiary  to  the 
great  countries  of  Argentina  and  Chile.  [Applause.]  I  took  a 
greater  pleasure  in  carrying  out  his  suggestion  that  a  minister  be 
accredited  to  the  prosperous  country  of  Uruguay  and  one  to  the 
heroic  country  of  Paraguay,  instead  of  accrediting  one  minister  to 
the  two  countries,  as  had  formerly  been  the  custom.  [Applause.] 

I  took  pride  in  the  passage  of  a  resolution  by  the  Congress  of 
the  United  States  extending  the  thanks  of  that  body  to  Ambassador 
Da  Gama,  Ambassador  Naon,  and  Ambassador  Suarez  for  their  un- 
selfish and  gracious  and  useful  work  as  mediators  in  the  trouble 
between  the  government  of  this  country  and  the  leaders  of  the  con- 
tending parties  in  the  Republic  of  Mexico.  But  I  believe,  gentle- 
men, and  I  thought  so  from  the  very  time  that  this  matter  was  first 
broached,  that  the  most  important  legislation  the  Congress  of  the 
United  States  has  had  to  deal  with  in  the  last  few  years  in  refer- 
ence to  Pan  American  affairs  was  this  proposition  for  the  Pan 
American  Financial  Congress. 

We  are  at  a  critical  period  in  the  affairs  of  the  Western  Continent. 
What  we  do  now  and  in  the  near  future  will  determine  whether  or 
not  the  Republics  of  America  shall  stand  together  and  cooperate 
for  the  good  of  all  the  American  countries.  I  believe  this  Confer- 
ence is  a  long  step  in  securing  that  cordial  cooperation.  I  know 
that  the  Congress  of  the  United  States  will  do  all  that  can  be 
expected  to  bring  it  about.  Standing  as  we  all  do  for  high  ideals 
and  sound  principles  of  government,  I  hope  and  believe  that  before 
long  this  will  be  attained.  [Applause.] 

In  the  farthest  east  the  first  dim  light  of  civilization  was  seen  and 
westernward  the  star  of  empire  has  taken  its  course  ever  since.  The 
cycle  is  completed.  The  star  blazes  to-day  in  the  world's  extreme 
west.  The  leadership  of  the  future  rests  upon  the  Americas,  and 
the  world  will  be  blessed  with  that  leadership.  [Applause.] 

We  of  the  Western  Hemisphere  stand  in  the  light  while  many 
of  the  great  nations  of  the  Eastern  Hemisphere  are  to-day  standing 
in  darkness.  We  are  preparing  for  peace.  They  are  waging  war. 
We  stand  for  ideals  and  for  principles  that  will  prevail,  and  that 
will  make  our  leadership  permanent;  ideals  and  principles  which, 
seen  from  the  misty  heights  of  the  future,  will  mark  out  the  way 
and  make  clear  the  path  which  all  the  nations  of  the  earth  will  trav- 
erse in  God's  appointed  time.  It  is  a  happy  omen  for  the  future  of 


PROCEEDINGS.  233 

the  world  that  the  Republics  participating  in  this  Conference  are 
united  by  treaties  which  require  time  and  deliberation  before  any 
trouble  shall  arise  out  of  disagreements  between  us — the  year  of 
deliberation  for  the  cooling  of  passion.  The  splendid  result  was 
the  conception  of  our  great  Secretary  of  State.  The  President,  with 
his  wide  vision  and  his  acute  insight  into  the  heart  of  economic, 
political,  and  international  conditions,  promptly  indorsed  this  con- 
ception and  gave  it  a  prominent  place  in  his  first  annual  address  to 
Congress.  When  the  principles  of  these  treaties  become  generally 
observed  we  will  see  everywhere  over  this  world  happy  and  pros- 
perous countries  and  contented  people,  and  the  names  of  Wilson  and 
Bryan  will  spring  to  the  lips  and  live  in  the  hearts  of  mankind  like 
a  song  learned  at  the  mother's  knee.  [Applause.] 

Secretary  McADOo:  The  Secretary-General  wishes  to  make  a  few 
announcements. 

MISCELLANEOUS  ANNOUNCEMENTS. 

The  Secretary-General,  Dr.  ROWE:  I  beg  to  announce  that  we 
have  received  a  telegram  from  the  conference  of  bankers  at  their 
meeting  in  San  Francisco,  the  Bankers'  Association  of  the  Pacific 
Coast  and  Rocky  Mountain  States.  The  telegram  is  as  follows : 

[Telegram.] 

SAN  FRANCISCO,  CAL.,  May  27,  1915. 

Secretary  of  Conference  of  Bankers  of  Central  America  and  South  America, 
with  the  Secretary  of  the  Treasury,  Care  Treasury  Department,  Washing- 
*on,  D.  C.: 

I  have  the  honor  to  transmit  for  your  attention  the  subjoined  resolution, 
which  was  unanimously  passed  at  the  convention  here  to-day  by  the  Bankers' 
Association  of  California,  Oregon,  Idaho,  and  Nevada. 
Yours,  respectfully, 

FEEDEBICK  H.  COLBUKN, 
Secretary  of  Joint  Convention. 

Whereas  a  Conference  is  now  being  held  in  Washington,  D.  C.,  between  the 
ministers  of  finance  and  leading  bankers  of  Central  and  South  American 
countries  with  the  Secretary  of  the  Treasury,  this  Conference  having  in  view 
the  discussion  of  problems  growing  out  of  the  opening  of  the  Panama  Canal 
and  looking  to  the  establishment  of  closer  commercial  relations  between  the 
countries  represented  at  the  conference :  Now,  therefore  be  it 
Resolved,  That  this  convention  of  bankers  from  the  States  of  Arizona,  Cali- 
fornia, Idaho,  Nevada,  and  Oregon  fully  realizes  the  importance  of  the  subjects 
to  be  considered  to  this  entire  country  and  particularly  to  the  Pacific  coast; 
that  it  awaits  with  much  interest  the  result  of  the  deliberations  and  believes 
that  the  better  understanding  growing  out  of  the  meeting  will  be  productive  of 
much  good  to  all  concerned. 


234  PAN  AMERICAN   FINANCIAL   CONFERENCE. 

Resolved,  That  this  convention  extends  to  our  distinguished  visitors  cordial 
greetings  and  wishes  for  them  a  pleasant  sojourn  in  this  country  and  a  safe 
return. 

Resolved,  That  the  secretary  of  this  convention  be  instructed  to  telegraph 
these  resolutions  to  the  secretary  of  the  meeting  in  Washington. 

The  Secretary-General,  Dr.  ROWE:'  I  desire  furthermore  to  state 
that  the  automobiles  for  this  afternoon's  trip  to  Fort  Myer  will 
leave  the  Pan  American  Building  at  4.30  o'clock,  instead  of  5  o'clock, 
as  announced  in  the  original  program.  The  hour  of  4.30  o'clock  is 
indicated  in  the  final  edition. 

I  am  also  requested  to  ask  the  members  of  the  Conference  if 
they  will  be  good  enough — in  case  they  have  not  had  time  to  an- 
swer the  invitation  for  to-morrow  evening's  banquet — to  indicate 
on  their  cards  whether  or  not  they  are  able  to  attend,  using  the  words 
"  yes  "  or  "  no,"  and  hand  these  to  me.  It  will  save  them  the  time  of 
writing  out  a  formal  acceptance.  Those  in  charge  oi  the  banquet  are 
very  anxious  to  hay  e  at  the  earliest  moment  possible  the  names  of  the 
gentleman  who  will  attend. 

In  conclusion,  let  me  ask  the  delegations  that  as  the  roll  is  called 
for  reports  of  the  Conference  Committees  they  will  be  good  enough  to 
let  us  have  a  duplicate  copy,  in  case  such  a  duplicate  copy  is  avail- 
able, in  order  that  we  may  use  one  of  the  copies  either  for  mimeo- 
graphing or  printing,  that  point  depending  upon  the  time  at  our 
disposal. 

Secretary  McAooo :  Gentlemen,  the  time  of  the  session  this  after- 
noon is  so  limited  that  it  will  net  be  possible  to  read  any  of  the 
reports  that  may  be  submitted  to-day.  We  shall,  therefore,  ask 
those  of  you  who  have  completed  your  reports  to  hand  them  to 
the  Secretary-General,  so  that  they  may  be  printed ;  and  to-morrow 
\ve  will  have  the  entire  day  within  which  to  read  reports,  if  you 
desire  to  have  them  read,  and  devote  such  time  as  may  be  possible 
during  the  concluding  session  to  a  discussion  of  them,  and  also  to 
the  consideration  of  any  other  matters  that  may  be  brought  before 
the  Conference.  So  I  shall  ask  those  who  have  reports  ready  to  be 
good  enough  to  hand  them  to  the  Secretary-General  this  afternoon. 
That  may  be  done  at  the  close  of  the  session  or  just  a  few  minutes 
before  the  adjournment. 

I  think  on  reflection,  and  as  the  Secretary-General  reminds  me,  it 
might  be  better  to  call  the  roll  of  the  countries  and  let  those  who 
have  their  reports  ready  answer  to  the  roll  call,  and  that  course  will 
now  be  taken. 


PBOCEEDINGS.  235 

ROLL  CALL  FOR  GROUP  REPORTS. 

(The  Secretary- General  proceeded  to  call  the  roll,  and  the  dele- 
gates responded  as  follows:) 

Argentina :  The  report  will  be  ready  to-morrow  morning. 

Bolivia :  The  report  will  be  ready  by  to-morrow  morning. 

Brazil :  The  report  is  to  be  sent  to  the  Secretary- General  to-day. 

Chile :  No  response. 

Colombia :  The  report  will  be  ready  at  about  6  o'clock. 

Costa  Rica :  The  report  has  been  submitted. 

Cuba :  The  Secretary-General  has  the  report. 

Dominican  Republic :  No  response. 

Ecuador :  The  report  is  in  the  hands  of  the  secretary  of  the  com- 
mittee. 

Guatemala:  No  response. 

Honduras :  No  response. 

Nicaragua :  The  report  has  been  submitted. 

Panama :  The  report  has  been  submitted. 

Paraguay :  The  report  will  be  sent  in  at  the  morning  session. 

Peru :  The  report  will  be  made  to-morrow.  It  is  being  typewritten 
now. 

Salvador :  The  report  will  be  ready  to-morrow. 

Uruguay:  To-morrow  there  will  be  some  additional  copies.  Re- 
port submitted. 

Venezuela :  The  report  will  be  ready  to-morrow  morning. 

Secretary  McADOo.  I  understand  that  the  Uruguayan  delegation 
desires  to  submit  something  to  the  Conference. 

URUGUAYAN  PROPOSAL  FOR  A  TOUR  BY  NORTH  AMERICANS. 

Dr.  PEDRO  Cosio  (Uruguay).  As  the  moment  for  closing  of  the 
Pan  American  Financial  Conference  in  Washington  approaches 
we,  the  delegates  from  the  Latin  American  Republics,  are  able  to 
appreciate  the  great  success  which  has  accompanied  the  happy  in- 
spiration of  Secretary  of  the  Treasury  McAdoo  in  having  origi- 
nated an  entirely  new  method  for  solving  questions  of  material  in- 
terest and  of  an  essentially  practical  character.  Truly  I  believe  this 
must  have  struck  everyone  just  as  it  struck  me  upon  receiving  the  in- 
vitation to  take  part  in  this  Conference,  considering  the  form  in 
which  it  was  set  forth.  What  occurred  to  me  was  that  the  idea 
was  very  original,  yet  I  did  not  perceive  in  what  way  one  could 
arrive  at  practical  results.  However,  we  see  this  now ;  these  meetings 
of  the  representative  men  of  America  are  the  principal  means  by 
which  we  shall  secure  real  union  of  an  economic  and  positively  bene- 
ficial character  for  the  commerce  and  industry  of  all  the  countries 
concerned — without  taking  into  account  the  ties  of  friendship,  which 


236  PAN  AMERICAN   FINANCIAL  CONFERENCE. 

is  one  of  the  chief  points.  And  so  convinced  am  I,  Mr.  Secretary, 
of  the  successful  issue  of  the  plan  suggested  by  the  Government  of 
the  United  States  that  I  am  going  to  take  the  liberty  of  adding  a 
proposition  which  I  shall  submit  to  my  distinguished  colleagues, 
the  Latin  American  delegates,  in  order  that  they  may  at  to-morrow's 
session,  if  that  is  possible,  express  their  assent  in  case  they  agree. 
The  proposal  is  as  follows : 

(1)  That  the  Latin  American  States  unite  in  inviting  the  banks 
and  industrial  and  commercial  groups  here  present  to  join  together 
and  visit  within  a  period  of  six  months  the  countries  of  Central  and 
South  America,  where  they  will  be  received  by  governments,  cham- 
bers of  commerce,  and  industrial  interests. 

(2)  To  which  end  the  governments  of  the  countries  to  be  visited 
will  hold  it  an  honor  to  have  the  visitors  as  their  guests. 

(3)  Details  regarding  the  itinerary,  etc.,  will  be  fixed  at  the  proper 
time. 

(4)  That  a  special  committee  representing  the  States  assembled 
here  be  formed,  together  with  their  diplomatic  representatives  accred- 
ited to  the  United  States,  for  the  purpose  of  taking  up  and  carrying 
out  this  suggestion. 

And  as  a  complementary  measure  I  would  suggest  that  the  Secre- 
tary of  the  Treasury  should  appoint  a  United  States  committee 
charged  with  giving  practical  form  to  this  idea  and  to  organize 
the  trip  which  is  to  result  from  it.  [Applause.] 

(The  Secretary-General  translated  the  foregoing.) 

Secretary  McADOO.  The  minister  and  delegate  from  Bolivia,  Sefior 
Calderon,  will  address  you. 

Dr.  CALDEROX  (Bolivia).  I  merely  want  to  make  the  suggestion  to 
my  colleagues  and  delegates  not  to  postpone  the  decision  of  this 
timely  proposition  presented  by  the  delegation  of  Uruguay  until  our 
session  to-morrow.  I  think  it  is  a  thing  that  will  go  further  than 
anything  else  to  prove  how  heartily  and  how  friendly  is  our  disposi- 
tion, and  I  will  ask  that  the  delegations  rise  and  approve  the  propo- 
sition unanimously. 

Secretary  McAooo.  Gentlemen,  the  suggestion  from  Uruguay  has 
been  read  to  you.  This  is  not  a  convention.  It  is  a  conference  for  the 
purpose  of  considering  suggestions,  not  for  the  purpose  of  taking 
action  upon  propositions  that  may  be  submitted.  Yet  this  proposal 
is  one  that  is  eminently  proper  to  be  acted  upon  by  the  delegates 
from  the  Central  and  South  American  countries  who  are  here. 
So,  if  it  is  agreeable  to  the  gentlemen  from  Uruguay  to  have  the 
matter  put  to  a  vote  of  the  foreign  delegates  this  afternoon,  I  shall 
be  very  happy  to  put  it.  Those  who  favor  it  will  say  "  aye." 

(The  suggestion  was  carried  by  a  unanimous  vote.) 


PROCEEDINGS.  237 

Secretary  McAooo.  We  have  now  about  thirty  minutes,  during 
which  we  may  consider  other  matters;  and  as  I  see  the  Honorable 
John  Bassett  Moore  I  will  ask  him  to  come  forward.  It  occurs  to  me 
that  perhaps  Mr.  Moore  may  have  his  report  ready. 

Mr.  MOORE.  Mr.  Chairman  and  gentlemen,  we  expected  to  have  our 
report  ready  by  this  time,  but,  although  the  printer's  task  is  not  com- 
pleted, copies  will  be  here  this  afternoon  and  will  be  submitted ;  and 
I  now  have  the  honor,  on  behalf  of  the  General  Committee  on  Uni- 
formity of  Laws  relating  to  Trade  and  Commerce  and  an  Interna- 
tional Commercial  Court,  to  present  its  report,  which  later  will  be 
distributed  in  printed  form,  and  which  may  be  acted  upon  to-morrow. 

Secretary  McAooo.  To-morrow  we  shall  ask  you  to  read  that  re- 
port, so  that  we  may  indulge  in  such  discussion  at  that  time  as  is 
proper. 

REMARKS  BY  MEMBERS  OF  THE  CONFERENCE. 

We  have  about  thirty  minutes,  which  may  be  devoted  to  talking 
about  matters  which  members  may  desire  to  bring  before  the  Confer- 
ence, and  several  gentlemen  have  notified  me  that  they  would  like  to 
say  a  few  words.  I  find  six  names  presented  here ;  that  would  allow 
five  minutes  to  each.  I  shall  be  relentless  in  dropping  the  gavel  on 
each  speaker  in  five  minutes,  I  warn  you  in  advance. 

I  shall  first  call  on  the  Honorable  Charles  H.  Sherrill,  chairman  of 
the  foreign  relations  committee  of  the  Chamber  of  Commerce  of  the 
United  States. 

Hon.  CHARLES  H.  SHERRILL  (of  New  York) : 

MR.  CHAIRMAN  AND  GENTLEMEN  OF  THE  CONFERENCE. — I  feel  very 
much  at  home  in  speaking  to  so  many  South  Americans,  because 
of  the  two  years  I  spent  on  the  banks  of  the  Eiver  Plate.  And 
that  moves  me  to  say  that  I  was  much  gratified  when  the  delegate 
from  Uruguay  spoke,  because  it  is  most  proper  that  he  should  speak 
at  a  conference  of  bankers.  I  may  say  to  my  North  American 
confreres  here  that  the  tradition  is  that  every  girl  baby  born  in 
Uruguay  is  going  to  grow  up  to  be  charming,  and  every  male  baby 
in  Uruguay  that  grows  up  is  certain  to  be  a  banker  and  move  to 
Buenos  Aires.  So  when  the  Uruguayan  delegate  spoke  on  banking 
I  assure  you  he  was  congenitally  prepared  to  do  so.  [Laughter.] 

I  have  an  advantage  over  some  of  my  North  American  colleagues 
here  in  that  I  lived  for  some  time  in  South  America  and  have  enjoyed 
that  exquisite  hospitality  which  comes  from  the  heart  there,  and 
which  I  am  afraid  generally  comes  from  a  studied  education  here.  The 
South  Americans  are  a  marvelous  people  to  live  amongst  and  a  very 
difficult  people  to  forget.  The  only  boast  I  can  make  of  my  stay  in 
South  America  is  that  no  North  American  ever  came  away  with  so 
great  an  affection  for  the  people  as  I  have. 


238  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

Now,  one  word  concerning  the  committee  on  foreign  relations  of 
the  Chamber  of  Commerce  of  the  United  States.  All  of  the  dele- 
gates I  think  by  this  time  have  learned  what  that  organization,  the 
Chamber  of  Commerce  of  the  United  States,  means.  It  is  a  gathering 
together  under  a  very  able  leader  of  nearly  three  hundred  and  sixty 
chambers  of  commerce  and  boards  of  trade  all  over  this  country. 
Those  interested  in  it  have  learned  many  things,  and  there  is  one 
thing  they  have  learned  which  seems  to  be  very  pertinent  to-day ;  that 
is,  that  the  people  of  Texas  differ  more  from  the  people  of  Boston 
and  the  people  of  Illinois,  than  do  any  of  the  South  American  coun- 
tries from  us. 

Now,  if  we  in  this  country  of  ours  can  live  together  happily  and 
become  a  strong  and  united  nation  in  all  matters,  as  recently  has  been 
demonstrated  in  the  field  of  foreign  affairs,  why  is  it  not  that  much 
easier  for  those  who  live  in  a  country  like  this  to  come  to  terms  of 
understanding  and  agreement  with  gentlemen  of  other  countries 
like  yourselves?  And  especially  is  that  true  when  you  reflect  that 
we  are  all  interested  in  the  same  part  of  the  world,  bounded  about 
by  the  same  oceans. 

A  great  thing  was  done  to  the  whole  of  this  hemisphere,  for  both 
North  and  South  Ajnerica,  when  that  splendid  mediation  of  the  South 
American  powers  was  made,  in  the  misunderstanding  between  our- 
selves and  Mexico.  That  caused  the  Latin- Americans  to  be  appre- 
ciated and  understood  in  North  America  as  never  before. 

Now,  the  action  which  you  gentlemen  are  bringing  about  is  to  put 
all  of  our  affairs  which  treat  with  the  other  part  of  this  hemisphere 
on  a  common  basis,  and  I  think  we  will  get  together  in  some  way,  as 
was  suggested  in  the  proposal  to  insure  neutrality  of  all  American 
waters,  so  that  it  will  be  difficult,  if  not  impossible,  for  the  civilization 
of  the  other  side  of  the  world  to  say  nay  to  any  proposition  which 
meets  with  the  approval  of  both  North  and  South  America. 

The  committee  on  foreign  relations  of  the  Chamber  of  Commerce 
of  the  United  States  is  trying  to  learn  all  it  can;  and  as  a  part  of 
that  education  we  beg  that  you  will  favor  us,  any  of  you  South 
American  and  Central  American  delegates,  with  ideas  that  you  may 
have.  We  receive  suggestions  from  all  parts  of  the  United  States, 
and  we  sincerely  hope  that  before  you  leave  you  will  get  into  touch 
with  us  and  give  us  the  benefit  of  your  advice  as  to  how  to  improve 
the  commercial  relations  between  this  country  and  Latin- America, 
because  that  is  our  sphere. 

I  am  very  much  gratified  to  have  this  opportunity  to  salute  you, 
and  to  say  from  my  heart  what  I  have  felt  ever  since  I  left  your 
wonderful  part  of  the  world.  [Applause.] 


PBOCEEDINGS.  239 

Secretary  McADoo.  I  shall  now  call  on  Mr.  Roger  W.  Babson. 

Mr.  ROGER  W.  BABSON  (of  Boston) : 

MR.  SECRETARY  AND  GENTLEMEN. — While  in  South  America  this 
winter  the  shipping  bill  was  under  discussion  here  in  Washington. 
Not  having  been  here  I  can  not  talk  intelligently  about  the  technicali- 
ties of  the  bill.  I  do,  however,  feel  that  it  would  be  shirking  duty  to 
permit  this  Conference  to  adjourn  without  testifying  as  to  how,  in 
m7  judgment,  Pan  America  stands  concerning  the  principle  under- 
lying this  project.  Moreover,  if  I  am  incorrect,  the  delegates  here 
can  answer  me. 

Let  me  say  that  I  found  in  every  country  excepting  one  an  almost 
unanimous  desire  that  this  government  enter  this  work.  The  con- 
sensus of  opinion  seemed  to  be  that  until  the  seas  are  under  inter- 
national control  we  will  not  make  our  shipping  lawrs  less  stringent 
by  permitting  the  use  of  cheap  labor.  Although  this  may  be  the 
solution  suggested  by  the  shipowners,  I  do  not  believe  that  the  people 
of  the  United  States  will  ever  stand  for  this  method  of  correcting 
the  difficulty. 

The  experience  of  these  Latin  American  countries  with  subsidies 
has  been  very  unfortunate.  However  large  these  subsidies  have  been, 
Germany,  England,  or  one  of  their  own  neighbors,  have  outbid  them 
and  the  value  of  the  subsidy  has  been  lost.  The  use  of  subsidies,  I  was 
told  by  Latin  American  officials,  consists  in  giving  one  larger  than  is 
given  to  the  ships  of  competing  nations.  There  seems  to  be  no  value 
to  subsidies  when  the  nations  begin  to  bid  against  one  another,  which 
is  the  inevitable  result  under  present  conditions.  My  Latin  American 
friends  also  complained  bitterly  of  the  deteriorating  effects  of  subsidy 
legislation  on  all  other  legislation,  as  it  greatly  opened  the  door  to 
graft. 

Hence  until  all  shipping  engaged  in  foreign  trade  is  under  uniform 
laws  and  flies  an  international  flag  the  only  other  means  of  building 
up  a  merchant  marine  is  by  the  use  of  government-owned  ships. 
This  is  not  merely  theory,  but  is  the  result  of  practical  experience 
with  all  the  different  systems  as  used  by  the  Latin  American  coun- 
tries. In  fact,  the  president  of  one  of  these  countries  asked  me, 
"  Can  democracy  lead  to  any  other  solution  ?  " 

As  to  the  great  need  of  better  shipping  facilities  between  the  two 
Americas  there  is  no  chance  for  argument.  In  talks  which  I  had 
with  the  highest  officials  of  all  those  countries  they  unanimously 
emphasized  this  point. 

Perhaps  the  President  of  Argentina  best  expressed  the  thought  by 
these  words : 

The  first  step  toward  bringing  any  peoples  together  must  be  better  means  of 
communication,  and  this  especially  applies  to  the  nations  of  the  Western 
Hemisphere. 


240  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

The  President  then  showed  me  a  report  of  his  government  on  the 
ships  which  arrived  last  year  in  Argentine  ports.  This  list  contained 
statistics  on  the  ships  of  about  twenty  nations;  the  United  States 
comes  third  from  the  end,  followed  only  by  Mexico  and  one  country 
whose  name  I  am  ashamed  to  mention. 

Gentlemen,  before  going  to  South  America  I  was  opposed  to  gov- 
ernment-owned merchant  marine,  but  I  am  now  convinced  that  it 
is  an  absolute  necessity  for  cementing  together  the  Americas.  I 
therefore  beg  of  you,  my  fellow  countrymen,  who  are  official  guests 
at  this  Conference,  not  to  oppose  this  principle  without  first  going  to 
Latin  America  and  studying  its  needs. 

Do  you  know  that  our  methods  are  incomprehensible  to  Latin 
America  ?  We  bring  these  Latin  Americans  here  to  the  United  States 
and  show  them  our  great  wealth ;  we  tell  them  in  eloquent  speeches 
of  our  great  love  for  their  countries  and  peoples ;  but  as  soon  as  we  are 
asked  by  their  governments,  or  even  our  own  government,  to  spend 
money  on  these  professed  bonds  of  friendship,  wre  run  away. 

The  time  has  come  when  we  should  either  "put  up  or  shut  up." 
Let  us  flirt  with  these  Latin  Americans  no  longer!  Let  us  either 
cease  our  caressing  words  or  else  show  our  faith  by  works.  This 
means  let  us  buy  their  bonds,  help  them  in  financing  their  public 
works,  organize  banks  which  will  lend  money  to  their  people,  adapt 
our  manufactured  goods  to  their  needs,  and,  most  important  of  all, 
adopt  the  suggestion  of  President  Wilson  and  Secretary  McAdoo 
by  building  ships  which  will  make  possible  that  interchange  of  peo- 
ples and  goods  which  is  fundamental  to  the  growth,  prosperity,  and 
happiness  of  the  Americas. 

In  other  words,  let  us  not  be  hypocrites !     [Applause.] 

Secretary  McADOO.  I  want  to  compliment  Mr.  Babson  on  being  able 
to  write  an  exactly  five-minute  speech.  He  hit  it  to  a  second. 

The  next  speaker  is  the  Honorable  J.  Van  Yechten  Olcott,  president 
of  the  Pan  American  States  Association. 

Hon.  J.  VAN  VECHTEN  OLCOTT  (of  New  York) : 

MR.  CHAIRMAN  AND  DELEGATES. — I  promise  I  will  not  use  the  five 
minutes.  I  want  first  to  thank  the  Secretary  of  the  Treasury  for 
his  graciousness  in  inviting  me  to  this  Conference.  It  is  only  in 
the  last  month  or  so  that  I  have  been  elected  president  cf  the 
Pan  American  States  Association.  This  association  has  existed  for 
about  three  years  and  has  had  merely  temporary  quarters,  our  pres- 
ent quarters  being  in  the  McAlpin  Hotel,  in  New  York.  We  are 
rather  ambitious  as  to  what  we  expect  to  do.  We  believe  that  within 
the  next  few  years  we  will  have  erected  a  building  in  the  city  of 
New  York  of  which  the  major  portion  will  be  used  for  perma- 


PROCEEDINGS.  241 

nent  international  exposition  purposes.  We  believe  that  the  South 
American  countries  will  bring  us  samples  of  the  goods  that  they 
have  to  sell  to  us,  and  we  believe  that  the  American  manufacturers 
will  show  a  very  hearty  cooperation  by  exhibiting  what  we  have 
to  sell.  This  building,  which  I  can  state  now  conservatively  is  prac- 
tically financed,  will  be  as  tall  as  the  Woolworth  Building,  in  New 
York.  There  will  be  something  like  forty  stories  to  it.  Most  of 
them  will  be  used  for  exhibitions  and  expositions,  and  the  remaining 
twelve,  fifteen,  or  sixteen  stories  will  be  used  for  club  purposes. 

We  have  the  cooperation  of  this  present  administration.  At  the 
suggestion  of  the  President  of  the  United  States  the  collector  of  the 
port  of  New  York,  a  very  able  subordinate  of  the  Secretary  of  the 
Treasury  who  is  presiding  here,  is  a  member  of  the  advisory  board. 

The  matter  that  I  wanted  particularly  to  speak  to  you  about,  the 
reason  I  am  glad  to  be  here  as  a  guest,  is  to  tell  you  that  we  hope 
before  you  gentlemen  go  to  your  own  countries  you  will  not  fail  to 
visit  our  temporary  quarters  and  become  interested  in  our  project. 
Before  you  leave  the  city  of  Washington  you  will  receive  special  in- 
vitations from  the  society  asking  you  to  come. 

I  do  not  want  to  go  in  detail  into  the  purposes  of  the  society,  ex- 
cept to  say  that  they  are  entirely  commercial,  and  I  wish  to  say  that 
the  name  of  our  association  probably  may  be  changed  to  the  "All 
Americas  Association."  I  would  like  to  add,  also,  that  we  are  entirely 
in  accord  with  the  union  of  which  Mr.  Barrett  is  so  happily  the 
head.  We  are  also,  at  present,  in  harmony  with  the  administration 
here,  and  I  am  perfectly  certain  we  will  always  be  so.  As  the  presi- 
dent of  the  association,  I  ask  you  when  you  come  to  New  York  to 
come  there  to  the  McAlpin  Hotel,  where,  as  I  say,  we  are  tempo- 
rarily occupying  a  considerable  suite  of  rooms,  and  see  for  your- 
selves what  we  are  starting  to  do.  I  think  you  will  then  believe  that 
we  will  accomplish  even  our  ambitions  and  large  desires.  When  you 
come,  I  am  sure  that  we  will  give  you  as  warm  a  welcome  as  we 
know  how,  and  we  will  try  to  vie  with  the  character  of  welcome  my 
friend  Mr.  Sherrill  says  that  you  in  South  America  give  to  visitors 
from  our  country. 

I  thank  you.    [Applause.] 

Secretary  McADOO.  I  am  afraid  my  good  friend  Mr.  Olcott  made 
one  statement  that  might  lead  to  a  wrong  inference,  and  I  know  he 
did  not  so  intend  it,  when  he  said  that  what  he  was  doing  was  in 
accord  with  the  administration  here.  I  do  not  know  whether  he 
meant  the  national  administration  or  not,  but,  of  course,  this  ad- 
ministration can  not  put  its  approval  upon  any  private  project,  and 

98257°— 15 16 


242  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

I  feel  assured  that  Mr.  Olcott  did  not  intend  to  create  such  an  im- 
pression. 

Mr.  OLCOTT.  I  beg  pardon.    I  did  not  mean  any  such  inference. 

Secretary  McADOO.  I  know  you  did  not  mean  that,  but  such  an 
inference  might  be  drawn  from  your  statement.  The  administra- 
tion can  not  put  its  approval  upon  any  project  of  that  character, 
however  worthy  it  may  be. 

The  next  gentleman  who  will  address  you  is  Mr.  A.  W.  Ted- 
castle. 

Mr.  A.  W.  TEDCASTLE  (of  Boston) : 

MR.  CHAIRMAN  AND  DELEGATES  TO  THE  CONFERENCE — I  have  been 
accorded  a  very  few  minutes  to  call  attention  to  an  evil  and  suggest 
a  remedy  in  the  matter  of  tax  on  salesmen  and  a  tax  or  tariff  on 
salesmen's  samples. 

Salesman's  tax. — The  present  tax  in  most  Republics  is  so  high  that 
many  manufacturers  are  deterred  from  making  experimental  trips. 
I  would  suggest  that  if  the  charge  was  reduced  to  a  reasonable  sum, 
and  one  payment  to  cover  all  cities  in  the  Republic,  the  additional 
number  of  travelers  would  more  than  make  up  the  amount  now  col- 
lected from  a  few. 

Tariff  or  duty  on  samples  and  remedy  suggested. — The  present 
plan  of  charging  duty  on  such  samples  as  boots  and  shoes,  even 
where  the  duty  is  returned,  is  so  unsatisfactory  and  expensive  that 
my  firm,  in  common  with  many  others,  has  found  it  necessary  to 
destroy  or  mutilate  many  hundred  dollars'  worth  of  samples  each 
year  so  that  they  may  be  entered  duty  free.  We  are  thus  put  to 
large  pecuniary  loss  and  do  not  feel  able  to  show  as  full  a  line  of 
merchandise.  For  this  loss  to  us  the  Republics  get  no  compen- 
sating advantage ;  instead,  the  reverse.  I  would  respectfully  suggest 
as  a  remedy  that  each  Republic  allow  salesmen  to  deposit  with  the 
customs  authorities  a  bond  issued  by  some  reputable  bonding  com- 
pany in  the  United  States,  said  bond  to  be  a  guaranty  that  the 
samples  will  be  taken  out  of  the  Republic.  Bond  to  be  returned  to 
the  salesman  when  such  samples  have  been  delivered  to  the  customs 
for  reshipment. 

I  do  not  know  how  our  friends  south  of  us  could  aid  the  manu- 
facturers and  merchants  of  the  United  States  more,  and  at  no  ex- 
pense to  themselves,  than  by  giving  this  matter  their  earnest  atten- 
tion; and  in  addition  to  that  I  wish  to  emphasize  the  fact  that  if 
two  or  three  Republics  should  fail  to  do  it,  then  either  the  salesmen 
would  pass  those  Republics  by  or  would  have  to  continue  losing 
money  by  mutilating  samples  and  rendering  them  valueless. 

I  leave  the  matter  with  you  and  thank  you  for  your  attention. 
[Applause.] 


PROCEEDINGS.  243 

Secretary  McAooo.  Mr.  William  C.  Le  Gendre  will  now  say  a 
few  words. 
Mr.  WILLIAM  C.  LE  GENDRE  (of  New  York) : 

MR.  SECRETARY  AND  GENTLEMEN  OF  THE  CONFERENCE — I  will  take 
but  a  moment  of  your  time.  In  casting  about,  in  planning  the 
American  shipping  bill,  I  ran  across  some  information,  and  will 
quote  the  following  in  the  case  of  Captain  Dollar,  of  San  Fran- 
cisco. This  gentleman  owns  both  United  States  and  foreign  ves- 
sels. He  has  stated  that  in  a  single  instance,  in  taking  a  ship 
from  foreign  registry  and  putting  it  under  the  American  flag,  it 
necessitated  the  employment  of  four  additional  quartermasters  at 
$70  a  month,  an  extra  engineer  at  $70  a  month,  three  water  tenders 
at  $75  a  month  (and,  incidentally,  nobody  seems  to  know  what  a 
water  tender  is  on  a  foreign  ship).  The  total  additional  cost  was 
$680  a  month,  or  $8,160  a  year,  simply  for  changing  the  flag  on  that 
ship !  In  addition,  there  is  the  difference  in  cost  for  tonnage  dues 
entering  every  port,  based  on  a  very  much  larger  tonnage  measure- 
ment under  the  American  flag.  The  total  difference  in  cost  of  oper- 
ating that  ship  would  closely  approximate  $12,000  a  year.  Is  there 
any  use  for  an  American  who  can  own  ships  and  operate  them  under 
the  English  flag,  for  instance,  to  put  them  under  the  American  flag 
and  pay  that  additional  amount  ?  Is  not  this  the  reason  why  we  do 
not  get  American  ships?  It  seems  to  me  that  this  statement  sums 
up  the  whole  question.  It  might  not  be  amiss  to  add  that  a  person 
more  expert  and  better  informed  than  I  could  add  further  expense 
in  respect  of  port  dues  and  other  charges  incurred  in  loading  and 
unloading.  [Applause.] 

Secretary  McADOO.  The  next  speaker  will  be  Mr.  William  S.  Kies, 
of  the  National  City  Bank. 

Mr.  WILLIAM  S.  KIES  (of  New  York) : 

MR.  SECRETARY  AND  GENTLEMEN  OF  THE  CONFERENCE — This  Confer- 
ence is  proving  an  inspiration  to  the  business  interests  of  the 
United  States.  You  distinguished  gentlemen  from  Central  and 
South  America  have  impressed  us  deeply  by  your  sincere  patriotism 
and  your  broad  vision.  The  picture  which  you  have  given  us  of 
the  Americas  united,  bound  together  by  ties  of  commercial  friend- 
ship, will  not  soon  fade. 

We  in  this  country  have  been  organizing  for  a  number  of  months 
in  order  better  to  prepare  ourselves  for  the  responsibilities  which 
must  be  ours  in  this  movement  for  extending  our  trade  relations. 
We  are  beginning  to  realize  how  great  has  been  our  ignorance  of 
some  of  the  fundamentals  of  foreign  commerce  and  how  much  is 
necessary  in  the  way  of  education  on  our  part.  Close  business  rela- 


244  PAN  AMERICAN   FINANCIAL   CONFERENCE. 

tions  are  in  all  cases  founded  upon  mutual  confidence  and  respect, 
and,  of  necessity,  must  be  preceded  by  mutual  acquaintance  and 
understanding.  You  have  invited  us  to  take,  to  a  certain  extent,  the 
place  in  your  business  world  formerly  held  by  the  unhappily 
estranged  nations  of  Europe;  but  you  have  known  and  done  business 
with  Europe  for  many  decades;  and  Europe,  through  its  associations 
and  its  business  experience  with  you,  has  a  more  thorough  under- 
standing and  appreciation  of  the  demands  of  your  markets,  of  the 
nature  of  your  institutions,  and  of  the  sterling  characteristics  of 
your  peoples,  than  we  can  as  yet  hope  to  have. 

The  most  important  element  in  the  development  of  commercial 
relations  is  the  extension  of  credits.  Fortunately  for  this  country, 
under  the  provisions  of  the  Federal  Reserve  Act  we  now  have  the 
financial  machinery  making  possible  a  free  extension  of  credit  in  aid 
of  the  importation  and  exportation  of  goods.  The  liberal  use  of 
these  credit  facilities  depends  only  upon  the  rapidity  with  which  we 
become  acquainted.  To  speak  with  entire  frankness,  in  the  United 
States  the  merchant  who  wishes  to  borrow  presents  from  time  to 
time  to  his  bankers  an  accurate  statement  of  his  financial  condition. 
The  bankers  of  this  country  habitually  interchange  credit  informa- 
tion. If  a  merchant  in  the  United  States,  therefore,  is  desirous  of 
knowing  the  credit  standing  of  a  possible  customer  anywhere  in  the 
country  he  may  ascertain  the  facts  on  short  notice.  The  extension  of 
credit  only  after  a  thorough  knowledge  of  a  concern's  financial  con- 
dition is  obtained  through  such  channels.  That  has  become  a  fixed 
business  habit  with  us. 

We  must,  therefore,  gentlemen,  ask  your  earnest  and  sincere  aid 
in  this  matter  of  credit  extension.  We  have  heard  from  many  sources 
of  the  high  sense  of  business  honor  obtaining  among  your  leading 
firms,  but  it  is  always  true  that  a  man  to  be  thoroughly  appreciated 
must  be  personally  known.  We  desire  sincerely  to  know  you  better. 
May  we  not  count  on  your  help  in  this  matter  ?  Through  your  com- 
mercial organizations,  and  through  such  permanent  committees  as 
it  is  hoped  may  grow  out  of  this  great  Conference,  will  you  not  co- 
operate with  us  by  urging  upon  your  merchants  and  your  business 
men  the  desirability  of  giving  to  such  United  States  banks  and  to  the 
representatives  of  such  commercial  interests  as  may  be  located  in 
your  respective  countries,  full  and  complete  information  regarding 
their  responsibility  and  financial  standing?  Our  merchants,  I  can 
assure  you,  will  be  equally  frank,  and  our  banks  and  our  credit 
organizations  are  even  now  prepared  to  give  to  your  merchants  in- 
formation in  complete  detail  concerning  the  commercial  houses  in 
this  country  who  may  wish  to  do  business  with  you. 

This  Conference  will  produce  results  lasting  and  permanent  if 
there  shall  develop  from  it  a  sincere  and  earnest  spirit  of  cooperation 


PROCEEDINGS.  245 

for  a  permanent  movement  toward  mutual  education  and  acquaint- 
ance along  commercial  lines. 
I  thank  you,  gentlemen.     [Applause.] 

(At  this  point  the  Honorable  Lindley  M.  Garrison,  Secretary  of 
War,  entered  the  room  amid  applause.) 

Secretary  McADOO.  Gentlemen,  I  have  the  very  great  pleasure  of 
announcing  that  our  distinguished  Secretary  of  War  has  been 
courteous  enough  to  extend  to  you  an  invitation  to  visit  Fort  Myer 
and  witness  a  drill.  Before  doing  so,  I  have  asked  him  if  he  will 
not  say  a  few  words  to  you.  It  gives  me  the  greatest  pleasure  to 
introduce  him  to  you  now — the  Honorable  Lindley  M.  Garrison. 

INVITATION  BY  SECRETARY  OF  WAR. 

Secretary  GARRISON.  Mr.  Secretary,  ladies  and  gentlemen:  This 
Conference  undoubtedly  marks  the  beginning  of  a  new  era  in  the 
Western  World.  It  constitutes  a  new  chapter  in  the  modern  history 
of  the  Americas.  It  is  "a  family  council  to  devise  ways  and  means 
to  benefit  mutually  the  members  of  the  family. 

It  must  be  a  source  of  personal  gratification  to  you  gentlemen  to 
have  had  the  opportunity  of  taking  part  in  this  great  work.  I 
felicitate  you  upon  that  happy  chance  and  also  upon  the  way  in 
which  you  have  taken  advantage  of  it.  The  atmosphere  generated 
by  you  is  charged  with  the  electric  quality  of  success;  and  with  the 
spirit  here  prevalent,  failure  is  impossible.  You  have  attended  the 
birth  of  a  movement  which  has  incalculable  potentialities  and  bene- 
fits to  the  peoples  of  all  the  countries  involved,  and  the  good  effects 
of  which  will  endure  from  generation  to  generation. 

I  am  very  much  pleased  to  have  been  afforded  the  opportunity  of 
meeting  you  and  of  saying  these  fews  words  to  you,  and  to  have  the 
further  opportunity  of  being  permitted  to  offer  you  a  little  rest  and 
diversion.  I  am  to  have  the  honor  of  having  you  accompany  me  to 
Fort  Myer,  a  near-by  military  post,  where  we  will  witness  some 
cavalry  evolutions.  [Applause.] 

Secretary  McAooo.  Now,  gentlemen,  it  is  my  very  great  pleasure 
to  transfer  you  to  another  gentleman  who  will  be  your  host.  I  am 
always  sorry  when  I  have  to  surrender  you  to  somebody  else  because 
I  enjoy  you  very  much  myself,  but  I  must  not  be  selfish  about  this 
matter.  So  I  am  now  going  to  turn  you  over  to  the  Honorable 
Secretary  of  War,  and  I  know  he  will  take  good  care  of  you. 

Gentlemen,  the  meeting  will  now  adjourn  and  you  will  find  auto- 
mobiles at  the  door  to  take  you  to  Fort  Myer. 

(Accordingly,  at  4  o'clock  p.  m.,  the  Conference  adjourned.) 


SIXTH  SESSION 


SATURDAY  MORNING,  MAY  29,  1915 


247 


SIXTH  SESSION,  SATURDAY  MORNING,  MAY  29. 


The  Conference  was  called  to  order  by  the  Honorable  William  G. 
McAdoo  at  10  o'clock  a.  m. 

The  Secretary  of  State,  the  Honorable  William  Jennings  Bryan, 
and  members  of  the  Federal  Eeserve  Board  were  invited  and  pro- 
ceeded to  take  seats  upon  the  platform. 

Secretary  McADOO.  The  Secretary-General  desires  to  make  certain 
announcements  before  we  proceed  with  the  business  of  the  Confer- 
ence. 

GENERAL  ANNOUNCEMENTS. 

The  Secretary-General,  Dr.  HOWE.  Gentlemen,  I  desire  to  repeat 
the  notice  given  yesterday  that  owing  to  the  fact  that  some  of  the 
representatives  from  the  United  States  did  not  register  we  were 
unable  to  secure  their  accurate  addresses;  and  I  desire  further  to 
state  that  all  of  these  gentlemen  have  been  invited  to  the  banquet 
this  evening.  If  you  have  not  received  an  invitation  it  is  due  to  our 
not  having  your  address  in  Washington.  Therefore  please  indicate 
on  a  visiting  card  before  you  leave  this  morning  whether  you  will 
attend  or  not.  This  will  enable  the  proper  arrangements  to  be  made. 

For  the  purpose  of  record  in  the  minutes  I  would  like  to  say  that 
Mr.  John  Clausen,  of  the  Crocker  National  Bank,  San  Francisco, 
has  submitted  a  memorandum  to  the  Conference. 

Secretary  McADOO.  I  wish  to  announce  that  the  President  will  be 
very  happy  to  receive  the  members  of  the  Conference  at  the  White 
House  at  12.30  o'clock  to-day  for  the  purpose  of  bidding  them 
good-by.  You  will  be  good  enough  to  enter  through  the  east  gate, 
opposite  the  Treasury  Building,  as  you  did  on  the  previous  occasion. 
The  session  will  adjourn  in  time  to  enable  you  to  go  to  the  White 
House. 

I  regret  very  much  to  say  that  the  reports  of  the  group  committees 
were  not  handed  in  in  time  to  be  printed  by  this  morning.  The  work 
upon  them  is  being  rushed  as  rapidly  as  possible.  I  wish  to  say  also 
that  I  think  the  group  committees  have  done  admirable  work  in 
getting  their  reports  ready  so  soon.  You  have  all  been  under  very 
great  pressure  this  week  in  trying  to  compress  into  a  comparatively 
short  time  matters  of  vital  importance.  The  result  is  it  will  not  be 
possible  this  morning  to  deal  with  these  committee  reports  in  the 
form  which  we  should  have  chosen  had  we  had  more  time.  I  would 
suggest,  therefore,  that  later  during  the  morning  the  roll  be  called, 
so  that  representatives  of  each  one  of  the  countries  may  address  the 


250  PAN  AMERICAN"  FINANCIAL  CONFERENCE. 

Conference  on  the  subject.  These  remarks  will  have  to  be  very 
brief,  but  an  opportunity  will  thereby  be  given  each  country  to  make 
some  general  observations  upon  the  character  of  its  report. 

The  reports  will  be  printed  and  distributed  later,  and  will  be  in- 
corporated in  full  in  the  published  proceedings. 

I  shall  now  ask  the  Honorable  John  Bassett  Moore,  in  connection 
with  the  report  from  the  Committee  on  Uniform  Laws,  kindly  to  give 
us  a  brief  outline  or  summary  of  the  conclusions  of  the  group  reports ; 
and  after  that  has  been  done  I  shall  ask  each  delegation  to  express 
itself  in  such  way  as  it  may  see  fit. 

We  shall  be  glad  to  have  Mr.  Moore  make  that  report  now. 

GROUP  REPORTS  SUMMARIZED. 

Mr.  MOORE.  Gentlemen,  as  the  president  of  the  Conference  has 
stated,  a  great  deal  of  work  has  been  devoted  to  the  preparation  of 
these  group  reports.  Although  I  have  been  connected  with  a  number 
of  conferences,  I  have  not  known  any  whose  members  applied  them- 
selves more  constantly  and  assiduously  and  devotedly  to  the  per- 
formance of  their  duties  than  have  the  members  of  this  Conference. 
It  may  be  said  that  they  have  dined  while  they  worked  and  worked 
while  they  dined.  They  have  worked  all  of  the  time. 

A  few  of  the  delegations  presented  written  suggestions  to  the  Sec- 
retary of  the  Treasury  on  their  arrival  here.  Those  papers  have  been 
printed  and  are  in  your  hands.  A  few  of  the  reports  of  the  group 
committees — three  or  four — have  been  printed.  A  number — I  should 
say  seven  or  eight  additional  reports — have  been  handed  in  in  manu- 
script. Others  probably  will  be  submitted  in  the  course  of  the  day. 
As  the  president  of  the  Conference  has  stated,  those  that  have  been 
presented  within  the  past  twenty-four  hours  in  manuscript  have  been 
turned  over  to  the  printer. 

I  have  undertaken  to  make  a  brief  summary  of  the  group  reports 
so  far  as  they  have  been  received. 

The  report  of  Bolivia  presents  a  full  review  of  the  financial  condi- 
tions and  trade  and  commerce  of  that  country,  including  its  natural 
resources,  particularly  its  minerals,  rubber,  timber,  fruit,  and  live 
stock.  It  also  deals  with  the  question  of  railway  extension  and  trans- 
portation, ocean  and  interior,  and  with  the  monetary  situation,  bank- 
ing and  finance.  It  suggests  the  organization  of  a  central  commer- 
cial agency  in  connection  with  or  under  the  supervision  of  the 
United  States  Chamber  of  Commerce. 

The  group  report  of  Chile  recommends  the  adoption  by  the  various 
countries  of  legislation;  first,  to  facilitate  the  drawing  of  bills  of 
exchange  upon  one  another  by  the  financial  institutions  of  South 
American  countries  and  the  financial  institutions  of  the  United 


PKOCEEDIKGS.  251 

States;  second,  to  make  bonded  warehouse  warrants  and  receipts 
available  as  collateral  security  for  the  development  of  international 
commerce.  It  recommends  the  advisability  of  permitting  the  pay- 
ment of  such  part  of  the  export  duties  on  nitrates  from  Chile  to  the 
United  States  (such  parts  as  are  now  paid  in  90  days  sight  drafts, 
sterling  on  London), in  90  days  sight  drafts  in  dollars  on  New  York, 
at  such  rates  of  exchange  as  may  be  periodically  fixed  by  the  Chilean 
authorities ;  also,  that  such  changes  be  made  in  the  laws  of  the  United 
States  as  will  enable  bankers  to  extend  their  credit  discount  and  re- 
discount facilities  so  as  to  conform  to  the  trade  customs  and  necessi- 
ties of  Latin  America.  It  also  recommends  that  a  permanent  inter- 
American  commission  be  established  to  study  commercial  problems 
and  conditions. 

The  Colombian  delegates  have  submitted  to  the  Conference  com- 
prehensive pamphlets  dealing  with  the  financial  and  economic  situa- 
tion in  that  country  and  with  the  question  of  public  works.  They 
recommend,  first,  special  committees  for  each  country,  similar  to 
those  appointed  in  connection  with  this  Conference;  secondly,  the 
cooperation  of  those  committees  in  financial  and  commercial  matters ; 
third,  the  consideration  of  the  establishment  of  a  general  executive 
council  to  meet  in  Washington  at  least  once  a  year ;  fourth,  the  con- 
sideration of  the  appointment  of  a  board  of  engineers  to  investigate 
projects  which  require  financing. 

The  report  of  the  Costa  Rican  group  gives  a  full  survey  of  the 
public  finances  of  that  country,  its  monetary  situation,  banking  situ- 
ation, and  financing  of  private  enterprises.  It  emphasizes  the  im- 
portance of  longer  credits  to  the  extension  of  inter- American  mar- 
kets. The  subjects  of  merchant  marine  and  improved  transportation 
facilities  are  very  fully  covered. 

The  report  of  the  Cuban  group,  after  a  study  of  commercial  rela- 
tions, recommends  that  the  high  duties  that  hamper  the  importation 
of  Cuban  tobacco  into  the  United  States  be  ameliorated,  and,  in 
view  of  the  abolition  by  the  United  States  of  import  duties  on  sugar, 
that  the  principle  of  the  reciprocal  reduction  of  duties  be  extended 
by  treaty  stipulations,  in  addition  to  those  that  already  exist,  so  as 
to  preserve  the  principle  of  reciprocity  as  the  foundation  of  trade 
relations  between  the  two  countries.  This  report  also  deals  with 
the  question  of  transportation  and  with  those  of  the  parcels  post, 
the  extension  of  credits,  and  the  sending  out  of  expert  commercial 
travelers  with  samples.  It  also  urges  the  making  uniform,  so  far 
•as  may  be  practicable,  of  commercial  laws  and  the  extension  of  the 
system  of  arbitration  for  the  settlement  of  commercial  disputes. 

The  report  of  the  Dominican  Republic  reviews  the  present  state 
of  the  public  finances  in  that  country  and  suggests  remedies  for 


252  £AN  AMERICAN  FINANCIAL  CONFERENCE. 

present  inconveniences.  Particularly  it  advises  a  reduction  of  the 
duties  on  Dominican  tobacco  in  the  United  States  and  the  making 
of  an  adequate  reciprocity  treaty  between  the  Dominican  Republic 
and  this  country.  The  present  banking  situation  and  the  extension 
and  liberalizing  of  banking  facilities  are  dealt  with ;  also  the  financ- 
ing, first,  of  public  improvements,  and,  second,  of  private  enter- 
prises. There  is,  besides,  a  discussion  of  the  extension  of  inter- 
American  markets,  while  the  development  of  the  merchant  marine 
and  the  improvement  of  transportation  facilities  are  emphasized. 
Attention  is  drawn  to  the  desirability  of  modifying  the  existing  postal 
conventions  in  these  particulars :  First,  the  extension  to  the  countries 
embracing  the  Pan  American  Union  of  the  same  letter  rates  as  now 
exist  between  the  United  States,  Cuba,  and  Mexico;  second,  the  ex- 
tension to  those  same  countries  of  the  same  rates  of  newspaper  post- 
age as  exist  in  the  United  States;  and,  third,  the  adoption  by  the 
same  countries  of  uniform  service  for  postal  money  orders  and 
parcels  post. 

Conditions  in  Ecuador  are  very  fully  presented  in  a  memorandum 
delivered  to  the  president  of  this  Conference  before  it  met.  The 
memorandum  is  full  of  suggestions  as  to  the  work  that  might  prop- 
erly be  undertaken  by  this  Conference.  These  suggestions  are 
grouped  under  11  heads,  and  in  all  embrace  32  different  topics,  and 
I  may  say  that  this  paper  was  very  useful  in  the  work  of  the  sub- 
committee of  the  committee  on  uniform  laws. 

The  report  of  the  Guatemala  group  contains  a  review  of  financial 
and  commercial  conditions  of  that  country.  It  recommends:  First, 
that  practical  demonstrations  be  given  in  Guatemala  of  agricultural 
machinery  and  tools  made  in  the  United  States ;  second,  that  the  at- 
tention of  American  manufacturers  be  drawn  to  the  opportunity 
for  the  use  of  portable  sawmills  in  cutting  the  woods  of  the  country, 
and  of  improved  sugar-cane  machinery;  third,  that  the  shipment  of 
wares  be  made  in  packages  suited  to  the  transportation  facilities  or 
requirements  in  the  various  countries;  fourth,  that  the  American 
manufacturers  maintain  in  Guatemala  City  a  permanent  exhibition 
of  their  products ;  fifth,  that  a  uniform  postal  system  throughout  the 
Americas  be  adopted ;  sixth,  that  there  be  a  uniform  classification  of 
articles  for  the  purpose  of  levying  customs  duties;  seventh,  that 
American  merchants  grant  credits  of  not  less  than  90  days  for  the 
payment  of  purchases ;  eighth,  that  expert  agents  be  sent  out  to  sell 
goods;  ninth,  that  facilities  be  afforded  in  American  schools  for 
young  men  from  Latin  America;  tenth,  that  increased  attention  be 
bestowed  in  Latin  American  countries  upon  the  study  of  political 
economy,  finance,  and  business  questions  in  the  schools;  eleventh, 
that  professors  and  students  be  interchanged ;  twelfth,  that  the  teach- 
ing of  Spanish  and  of  courses  in  the  history  and  geography  of  Latin 


PEOCEEDINGS.  253 

America  be  more  generally  provided  in  the  United  States ;  thirteenth, 
that  chambers  of  commerce  be  more  generally  established;  and, 
finally,  that  the  improvement  of  transportation  facilities,  the  appoint- 
ment of  consulting  commissions  in  each  country,  and  the  extension 
of  banking  facilities,  be  always  borne  in  mind. 

The  report  of  the  Nicaragua  group,  which  is  in  type  and  which 
has  probably  reached  your  hands  by  this  time,  reviews  the  political, 
commercial,  and  financial  condition  of  that  country,  describes  its 
natural  resources,  emphasis  the  importance  of  improving  banking 
facilities,  draws  attention  to  the  fact  that  Nicaragua  is  a  promising 
field  for  the  investment  of  capital,  and  recommends  a  ratification  by 
the  United  States  of  the  pending  treaty  between  ths  two  countries. 

The  report  of  the  Panama  group  makes  recommendation  in  regard 
to  the  acceptance  by  local  banks  and  dealers  of  coupon  books  issued 
by  the  Panama  Canal  Company,  in  the  purchase  of  commodities,  and 
certain  changes  in  the  practices  of  the  commissaries  owned  directly  or 
indirectly  by  the  United  States.  It  also  recommends  that  dis- 
criminatory freight  rates  of  the  Panama  Railroad  Company  be  abol- 
ished; and  that  the  use  of  the  canal  for  transportation  between  the 
ports  of  Panama  and  Colon  be  secured  freely.  It  also  recommends 
that  the  Federal  Eeserve  Board  open  branch  banks  in  North,  Central, 
and  South  America ;  that  shipping  facilities  be  improved ;  and  that  in 
sending  out  quotations  or  prices  and  in  the  drawing  of  drafts,  com- 
putation be  made  upon  the  United  States  dollar. 

The  report  of  the  Salvador  group  emphasizes  the  lack  of  com- 
mercial treaties  between  that  country  and  the  United  States.  It 
recommends  the  establishment  of  a  chamber  of  commerce  in  Salva- 
dor; it  strongly  urges  cooperation  of  banking  institutions  in  estab- 
lishing reasonable  credits;  and,  lastly,  the  exchange  of  students  and 
the  wider  dissemination  of  commercial  and  agricultural  information. 

The  report  of  the  Uruguay  group  deals,  first,  with  the  improve- 
ment of  transportation — (a)  by  abolishing  discriminatory  duties, 
and  (b)  by  granting  direct  or  indirect  subsidies  to  shipping,  or 
both;  second,  with  the  adoption  of  the  metric  system  of  weights 
and  measures,  and  meanwhile  the  making  up  prices,  invoices,  and 
bills  of  lading  in  the  metrical  unit.  Thirdly,  it  urges  that  cheaper 
cable  rates  be  secured,  and  that  the  governments  undertake,  in  co- 
operation, the  development  of  wireless  telegraph  systems.  The 
report  recommends  the  establishment  of  an  international  monetary 
unit  and  of  improved  banking  facilities,  the  granting  of  more 
liberal  credits,  and  the  adhesion  of  the  North  American  countries  to 
the  South  American  postal  convention  of  Montevideo  of  June,  1910. 
The  report  further  recommends  the  making  of  reciprocity  arrange- 
ments ;  the  interchange  of  students ;  and,  lastly,  the  decrease  of  duties 
on  the  necessaries  of  life  and  the  adoption  of  progressive  taxes  on 


254  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

inheritance,  and  also  the  cooperation  of  the  governments  forming 
the  Pan  American  Union  in  devising  and  in  enforcing  measures  to 
overcome  frauds  in  these  particulars. 

This,  gentlemen,  is  a  summary  of  the  group  reports  in  so  far  as 
they  have  been  received  up  to  the  present  moment. 

Secretary  McADOO.  I  shall  now  ask  the  Secretary-General  to  be 
good  enough  to  call  the  roll  of  the  different  countries,  so  that  we 
may  have  such  remarks  as  the  delegates  may  care  to  make  upon  the 
subject  of  these  reports.  I  may  say  that  after  the  roll  call  a  report 
will  be  called  for  from  the  Transportation  Committee  and  also  from 
the  Committee  on  Uniform  Laws. 

Mr.  MOOKE.  I  beg  pardon,  Mr.  Chairman ;  I  find  that  I  have  over- 
looked the  very  full  Brazilian  report  that  has  been  presented.  This 
report  deals  with  the  financing  of  transactions  involving  the  impor- 
tation and  exportation  of  goods,  with  question  of  local  and 
commercial  banking  and  with  the  various  questions  of  trade 
and  of  commerce.  It  recommends  in  particular  first,  that 
greater  prominence  be  given  in  the  public  schools  and  other 
educational  institutions  of  the  United  States  to  the  study  of  the 
Central  and  South  American  countries,  their  geographical  loca- 
tion, natural  resources,  government,  and  languages;  second,  that  em- 
phasis be  given  to  the  necessity  of  greater  liberality  being  exercised 
in  the  interpretation  of  customs  regulations  by  the  United  States 
and  Latin  America,  especially  with  respect  to  the  free  entrance  or 
drawback  of  duty  on  travelers'  samples  or  other  samples  intro- 
duced into  the  respective  countries  solely  for  the  purpose  of  pro- 
moting trade.  It  accentuates,  in  the  third  place,  the  necessity  of 
the  more  effective  protection  of  trade-marks;  fourth,  the  facili- 
tation of  reciprocal  business  relations  between  merchants  and 
manufacturers  of  both  nations,  the  granting  of  such  reasonable 
credits  in  both  directions  as  may  be  safe  and  desirable,  and  the 
establishment  of  trustworthy  means  whereby  merchants  and  manu- 
facturers of  either  nation  can  determine  with  reasonable  accuracy 
the  financial  responsibility  of  the  purchasers  of  the  other;  fifth,  the 
establishment  is  recommended  between  the  United  States  and  Latin 
American  countries  of  a  system  of  direct  exchange  based  on  the 
dollar  unit  of  the  United  States;  sixth,  in  order  to  facilitate  the 
interchange  of  products  adapted  to  the  needs  of  American  countries, 
it  recommends  the  formation  of  bureaus  of  standards  of  the  re- 
spective countries  to  standardize,  in  so  far  as  possible,  the  require- 
ments of  each  country,  and  recommends  to  the  manufacturers  and 
purchasers  of  the  several  countries  the  immediate  recognition  of  such 
standards  and  corresponding  weights  and  measures;  seventh,  atten- 
tion is  drawn  to  the  favorable  results  which  have  followed  the  grant- 


PROCEEDINGS.  255 

ing  by  Brazil  and  Cuba  of  preferential  duties  applying  to  certain 
products  of  the  United  States,  and  the  extension  of  reciprocal  tariff 
concessions  between  the  Latin  American  countries  and  the  United 
States  is  strongly  urged;  eighth,  it  emphasizes  the  extreme  need  of 
rapid,  frequent,  and  dependable  marine  transportation  service  to 
provide  adequately  for  the  maintenance  and  development  of  com- 
merce between  the  countries  of  North  and  South  America;  ninth, 
recommends  that  the  postal  rates  now  existing  within  the  United 
States  be  extended  to  include  the  Latin  American  countries  and 
made  reciprocal,  and  that  it  is  of  the  very  greatest  commercial  im- 
portance that  a  parcels  post  and  money-order  system,  be  generally 
established ;  terith,  urges  the  extension  of  direct  telegraphic  service, 
either  wireless  or  cable,  between  all  parts  of  North,  Central,  and 
South  America,  to  be  owned,  controlled,  and  operated  by  exclusively 
American  interests;  eleventh,  recommends  to  the  press  of  all  the 
interested  countries  that  a  more  comprehensive  and  reliable  system 
for  the  exchange  of  important  news  items  be  established. 

Secretary  McAooo.  I  ought  to  say  to  the  Conference  that  the  rea- 
son Mr.  Moore  has  not  been  able  to  summarize  all  the  reports  is  that 
some  have  not  yet  come  to  the  Secretary-General.  When  those  coun- 
tries are  called  I  should  like  their  representatives  to  give  a  brief  out- 
line or  a  lengthy  outline,  as  they  choose,  of  their  reports. 

(Hereupon  the  roll  was  called.) 

REMARKS  IN  CONNECTION  WITH  GROUP  REPORTS. 

Argentina  (Dr.  Aldao) :  Argentina  will  have  to  wait  until  her 
report  is  in. 

Bolivia  (Dr.  C  alder  on) :  As  the  result  of  our  conferences  we  can 
see  that  there  are  certain  things  which  it  is  the  duty  of  all  countries 
to  decide,  such  as  banking  facilities  for  the  benefit  of  the  different 
interests  of  the  countries. 

Another  point  on  which  everybody  seems  to  be  in  agreement  is  the 
subject  of  the  liberalization  of  laws  concerning  the  acceptance  of 
samples,  the  reduction  of  the  taxes  on  the  men  that  go  to  sell,  the 
facilitation  of  commerce,  and,  finally,  the  development  of  merchant 
marine.  It  would  be  useless  to  try  to  establish  without  a  merchant 
marine  any  commerce  or  interchange  of  business  between  the  coun- 
tries. 

There  is  another  point,  more  of  future  interest,  which  the  Bolivian 
delegation  has  thought  necessary  to  point  out,  and  that  is  the  estab- 
lishment of  an  agency  under  the  supervision  or  the  direction  of 
the  Chamber  of  Commerce  of  the  United  States.  This  cham- 
ber represents  almost  all  the  organizations  of  the  country.  The 
different  reports  submitted  here  will  have  no  effect  if  there  is  not  a 


256  PAN  AMEKICAN   FINANCIAL  CONFEKENCE. 

central  agency  where  all  these  things  could  be  gathered  together.  In 
Bolivia,  for  instance,  there  is  need  for  the  establishment  of  sanita- 
tion, for  the  construction  of  sewerage,  and  for  other  public  necessities. 

For  example,  in  the  proposal  to  construct  a  railroad,  one  could  use 
that  central  agency  for  information  from  which  he  could  learn  not 
only  of  the  facilities,  but  where  to  go  and  with  whom  to  deal ;  and  at 
the  same  time  it  would  be  possible  for  the  people  of  the  United  States 
interested  in  that  project  to  hear  that  the  necessity  existed.  To-day, 
for  instance,  anybody  coming  from  Latin  America  to  make  purchases 
in  the  United  States  has  to  go  to  firms  already  well  known.  The 
person  coming  to  make  such  purchases  may  find  himself  absolutely 
in  the  hands  of  a  speculator  who  might  not  always  be  looking  to  the 
interest  of  the  country,  but  to  his  own.  If  we  could  have  a  central 
agency,  that  agency  would  notify  the  firms  in  the  United  States 
dealing  in  those  special  lines  that  such  and  such  a  country  was  in 
the  market,  and  thereby  competing  bids  would  be  received,  and  it 
would  be  perfectly  easy  to  ascertain  where  to  place  those  contracts 
here  with  all  assurance  of  their  being  honestly  carried  out.  I  can 
give  an  illustration.  When  I  first  came  to  the  United  States  it  was 
for  the  purpose  of  contracting  for  railroad  construction  in  Bolivia. 
I  did  not  know  to  whom  to  go ;  I  did  not  know  how  to  commence  the 
undertaking;  but,  fortunately,  I  struck  a  man  who  realized  the  pos- 
sibilities of  the  plan  and  also  was  able  to  help  with  capital,  and  in 
spite  of  fear  of  touching  the  modesty  of  Mr.  Vanderlip  I  would  say 
he  was  that  man.  [Applause.]  I  was  thereby  enabled  to  deal  with 
a  firm  capable  of  carrying  out  this  contract,  and  when  I  made  it  I 
could  say  to  my  Government,  "Here  is  an  agreement  made  in  the 
United  States  that  will  be  carried  out  to  the  letter  on  their  part;  if 
we  will  perform  our  part  they  will  perform  theirs."  That  contract 
has  been  carried  out  during  the  last  nine  or  ten  years.  What  has  been 
happening  in  other  countries?  They  have  lost  thousands  of  dollars, 
and  the  United  States  has  lost  many  contracts,  because  they  have 
been  undertaking  their  own  work.  The  Latin  American  countries 
have  no  means  to  carry  this  out,  and  many  of  those  with  whom  they 
attempt  to  deal  try  to  speculate,  to  the  disadvantage  of  the  country. 
Therefore  the  establishment  of  such  an  agency,  in  the  minds  of  the 
delegation  of  Bolivia,  is  a  very  necessary  thing  to  insure  the  proper 
fulfillment  of  any  obligations  we  may  make  here,  and  to  afford  a 
central  point  where  we  may  go  to  acquire  the  information  needed. 
I  do  not  wish  to  take  any  more  time  of  the  Conference,  but  I  wanted 
to  call  attention  to  this  subject,  which  seems  to  be  of  sufficient  impor- 
tance to  be  taken  into  consideration  and  discussed. 

Brazil  (Dr.  Cavalcanti) :  Mr.  Secretary  of  the  Treasury  and 
gentlemen:  Before  you  make  your  closing  address  may  I  be  per- 
mitted to  state  that  I  am  returning  home  very  glad  to  be  able  to  say 


PEOCEEDINGS.  257 

that  the  lofty  purpose  you  have  had  in  calling  this  Pan  American 
Financial  Conference  has  proved  quite  justified.  Indeed,  in  the  short 
time  of  a  few  days — but,  fortunately,  under  your  competent  and 
highly  intelligent  leadership — the  Conference  has  been  enabled  to 
reach  its  principal  end — that  is,  to  establish  proper  bases,  upon  which 
one  can  rely,  with  regard  to  the  increasing  and  improving  of  the  eco- 
nomic and  financial  intercourse  between  all  the  American  Republics. 
Brazil,  here  represented  by  me,  congratulates  you  and  your  govern- 
ment upon  this  deserving  achievement.  Let  us,  then,  all  of  us,  work 
in  that  direction;  let  us  work  in  the  spirit  of  common  interest;  let  us 
work  in  the  spirit  of  justice,  peace,  and  fraternity ;  let  us  work  finally 
on  the  behalf  of  the  progress,  development,  and  growth  of  all  of  our 
countries,  and  success  can  not  fail  to  be  the  final  result  of  our  aims, 
endeavors,  and  efforts.  [Applause.] 

Chile  (Dr.  Izquierdo)  :  Mr.  Chairman  and  gentlemen,  after  the 
statement  of  the  Honorable  John  Bassett  Moore  we  believe  there  is 
not  much  more  to  add  to  our  report.  This  report  refers  to  the 
transportation  problem  and  to  the  means  of  providing  certain  fa- 
cilities for  banking.  I  believe  the  reading  of  it  will  give  sufficient 
information. 

We  have  only  to  thank  the  Secretary  of  the  Treasury  for  the 
trouble  he  has  taken  for  us  in  this  Conference  and  to  express 
our  appreciation  of  the  many  courtesies  offered  us  while  here. 
[Applause.] 

Colombia  (Dr.  Ancizar) :  Mr.  Secretary  and  gentlemen,  the  sug- 
gestions made  by  the  committee  of  Colombia  are  more  or  less  the  same 
as  those  made  by  the  Committee  of  Bolivia,  and  as  the  explanations 
given  by  Seilor  Ballivian,  of  Bolivia,  apply,  I  really  have  nothing 
special  to  add.  I  only  wish  to  thank  you,  Mr.  Secretary,  in  behalf 
of  Colombia  for  the  efforts  made  to  assure  the  success  of  this  Con- 
ference and  for  the  courtesies  extended.  [Applause.] 

Costa  Rica  (Dr.  Guardia)  :  I  have  nothing  special  to  say.  My 
report  explains  itself. 

Cuba  (Dr.  Desvernine)  :  Mr.  Secretary  and  gentlemen,  I  want  to 
say  that  we  have  already,  according  to  your  suggestion,  submitted  a 
report,  and  there  will  be  a  memorandum,  which  we  have  made  a 
source  of  general  information  on  the  matters  we  were  to  deal  with. 

We  did  not  go  at  great  length  into  the  subjects  under  considera- 
tion because  we  have  only  had  four  sessions  of  about  an  hour  and  a  half 
or  two  hours  each  on  a  program  of  which  we  were  notified  only 
when  we  arrived  in  Washington,  and  we  understood  also  that  in 
view  of  the  little  time  we  had  in  which  to  make  a  statement  of  our 
views  and  because  of  the  varied  program  given  us  it  was  supposed  that 
what  was  expected  from  us  was  a  simple  statement  of  the  Group 
98257°— 15 17 


258  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

Committee's  conclusions.  That  is  why  we  have  made  only  a  very 
short  report,  in  which  I  hope  that  all  the  essentials  in  regard  to  the 
relationship  between  Cuba  and  the  United  States  and  with  the 
other  sister  Eepublics  are  hinted  at  if  not  expressed  as  fully  as  they 
should  be. 

This  is  perhaps  the  last  chance  I  personally  shall  have  to  see  you, 
but  I  do  not  want  to  go  back  to  my  seat,  much  less  to  my  country, 
without  expressing  to  you  our  profound  gratitude  for  your  kindness, 
for  your  assiduous  assistance  and  leadership  in  this  Conference.  I 
also  wish  to  offer  our  respects  to  the  President  of  the  United  States 
and  to  the  Honorable  Secretary  of  State,  Mr.  William  Jennings 
Bryan,  who  has  given  us  not  only  the  pleasure  and  the  honor  of  his 
presence  here  but  also  his  cooperation  and  help.  [Applause.] 

Dominican  Republic  (Dr.  Peynado) :  Mr.  Chairman  and  gentle- 
men of  the  Conference,  our  Group  Committee  report  has  already  been 
presented.  We  therefore  wish  merely  to  express  our  great  apprecia- 
tion of  your  courtesy  and  our  hope  for  the  success  of  the  work  that 
shall  come  from  this  Conference. 

Ecuador  (Dr.  Gonzales) :  Mr.  Secretary  and  gentlemen  of  the 
Conference,  the  report  of  Ecuador  has  just  been  handed  to  the  Secre- 
tary-General. It  was  framed  according  to  the  questions  submitted 
in  the  program,  and  in  addition  it  has  the  honor  to  present  thirty-two 
subjects  for  discussion.  Unfortunately  the  time  has  been  so  short  that 
it  was  not  possible  to  take  these  matters  into  account.  I  should  like, 
however,  to  ask  the  Conference  to  take  some  action  on  a  very  im- 
portant point  which  has  been  absolutely  disregarded.  It  is  on  the 
subject  of  banking.  What  is  the  use  of  attempting  to  establish 
branches  in  Latin- American  countries,  which  we  desire  and  which 
this  country  desires  to  establish,  if  there  is  no  law  providing  for 
them  ?  So  far  as  I  know,  there  is  not  a  single  law  in  South  America 
or  in  Central  America  whereby  branches  of  foreign  banks  have  been 
given  any  legal  status  in  those  countries.  They  are  tolerated,  they 
are  permitted,  but  they  are  not  regulated  by  law.  I  think  it  would 
be  very  important  to  recommend  to  the  different  Governments  the 
adoption  of  such  legislation  as  would  be  suitable  to  each  one  tending 
to  give  the  branches  of  foreign  banks  a  legal  standing.  The  same  is 
true  in  regard  to  foreign  corporations.  I  have  had  some  experience 
of  that  in  New  York,  and  I  have  seen  the  troubles  which  arise  every 
day  there  through  the  lack  of  provisions  in  Latin- American  countries 
in  regard  to  the  standing  of  foreign  corporations. 

With  regard  to  money,  we  are  requested  to  recommend  the  adop- 
tion of  the  gold  standard  to  the  Committee  on  Uniform  Laws.  We, 
however,  advise  the  advantage  of  forming  a  Pan  American  money 
union,  so  that  the  currency  of  each  country  may  circulate  in  the 
others  under  certain  restrictions.  Also,  the  listing  in  this  country  of 


PBOCEEDINGS.  259 

the  securities  of  Latin  American  countries.  Thus  far  Europe  has 
been  the  market  for  Latin  American  securities.  These  securities  have 
not  been  floated  in  the  United  States.  Many  of  them  might  find  a 
market  here  if  the  people  knew  something  about  them. 

There  are  other  recommendations,  Mr.  Chairman,  that  I  will  not 
take  the  time  to  present  now,  but  I  think  that  these  remarks,  together 
with  the  report  of  the  delegation,  will  surely  be  of  some  benefit  later. 

I  wish  to  take  advantage  of  this  opportunity  to  thank  various  per- 
sons, especially  the  group  committees,  for  the  attention  they  have 
given  and  the  pains  they  have  taken  with  each  one  of  these  subjects. 
The  American  business  man  is  considered  all  over  the  world  to  be  a 
very  selfish  creature,  but  I  think  he  has  given  us  proof  of  something 
entirely  different.  These  gentlemen  whose  time  is  very  valuable, 
sometimes  worth  many  thousands  of  dollars  per  hour,  have  sacrificed 
one  whole  week  of  their  time  to  listen  to  us,  expecting  nothing  from 
it  but  the  common  good  of  all.  [Applause.] 

Guatemala  (Dr.  Sanchez  Ocana)  :  Mr.  Chairman  and  gentlemen, 
we,  the  delegates  from  Guatemala,  have  just  listened  to  a  summary 
of  the  recommendations  submitted  by  the  Guatemala  Group  Commit- 
tee report  to  the  Conference  and  have  nothing  to  add  to  it.  WQ 
desire,  however,  to  avail  ourselves  of  this  opportunity  to  express  once 
again  our  thanks  to  the  Government  of  the  United  States  for  the 
kind  invitation  extended  to  the  Government  of  Guatemala  to  be  rep- 
resented here.  We  congratulate  the  Secretary  of  the  Treasury  for  the 
great  success  his  efforts  have  had,  and  we  beg  him  to  convey  our  con- 
gratulations to  every  official  of  this  Republic.  During  these  days  of 
unremitting  effort  the  seed  has  been  sown,  we  believe,  which  will  most 
certainly  bear  much  fruit,  as  the  various  suggestions  formulated  at 
this  time  are  carried  into  effect.  On  the  Treasury  Department  of  this 
country  will  rest  the  duty  of  taking  up  the  needs  and  conditions  as 
they  have  been  outlined  here,  and  of  giving  them  practical  shape, 
which  will  conform  to  the  lofty  purposes  that  this  government  had  in 
view  in  calling  the  Conference  together  and  the  other  governments  of 
this  continent  had  in  attending. 

We  desire  to  offer  our  thanks  to  the  Honorable  Secretary  of  State 
and  the  Secretary  of  the  Treasury  for  the  gracious  marks  of  atten- 
tion we  have  received  from  the  moment  we  landed  in  this  country. 
Our  stay  amongst  you  will  always  be  a  most  happy  memory.  We 
beg  to  be  allowed  at  this  closing  session  to  express  our  gratitude  to 
the  representatives  from  the  United  States  on  the  Guatemala  Group 
Committee  for  the  breadth  of  vision,  the  good  will,  and  the  loyalty 
with  which  they  worked  in  the  preparation  of  the  suggestions  we  have 
just  had  the  honor  to  submit  to  this  distinguished  assembly. 

Honduras  (Dr.  Cordova) :  Mr.  Chairman,  gentlemen,  I  beg  to 
submit  the  Group  Committee  Report  prepared  by  the  Honduras  dele- 


260  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

gation  with  the  assistance  of  the  representatives  from  the  United 
States  on  that  committee.  Honduras  has  faith  in  the  success  of 
this  Conference  and  believes  that  in  due  time  practical  benefits  will 
come  from  it.  The  Honduras  delegation  thanks  most  cordially  the 
Secretary  of  the  Treasury  for  the  many  courtesies  it  has  received. 
Gentlemen,  we  do  not  wish  to  say  "  Good-by,"  because  this  word  has 
an  unhappy  significance ;  I  would  rather  our  parting  be  " Au  revoir." 

Nicaragua  (Mr.  SOL  WEXLER — New  Orleans)  :  Mr.  Secretary  and 
delegates  to  the  Conference,  I  have  the  honor  to  have  been  requested 
by  the  Honorable  Doctor  Pedro  Eafael  Cuadra,  chairman  of  the 
Nicaraguan  Committee,  to  say  a  few  words  on  the  report  which  that 
committee  has  submitted,  fortunately  in  time  to  have  been  printed, 
and  of  which  copies  are  here  available.  In  that  report  reference  was 
made  to  the  present  stable  political  conditions  existing  in  the  Repub- 
lic of  Nicaragua  at  this  time,  due  to  the  very  excellent  and  patriotic 
government  of  the  President,  Dr.  Adolf  o  Diaz.  It  has  been  shown  to 
us  by  the  representatives  of  that  country  that  the  affairs  of  Nicaragua 
are  at  this  time  administered  in  such  a  manner  as  to  inspire  the  con- 
fidence of  the  investing  public  throughout  this  country,  and,  in  fact, 
every  other  country  seeking  investment  in  foreign  lands.  We  have 
also  referred  in  this  report  to  the  wonderful  resources  of  the  Repub- 
lic of  Nicaragua;  in  fact,  showing  that  it  is  a  veritable  El  Dorado 
for  the  agriculturist,  the  miner,  the  merchant,  the  banker,  and  the 
lumberman;  and  we  have  said  in  this  report  that  if  the  present 
established  and  peaceful  conditions  can  be  assured  we  believe  that 
ample  capital  will  be  forthcoming  for  the  development  of  these 
resources.  In  that  connection  full  explanation  has  been  made  to 
us  of  the  pending  treaty  between  the  United  States  and  the  Re- 
public of  Nicaragua,  and  we  have  strongly  recommended  in  this 
report  the  adoption  of  this  treaty  by  both  Houses  of  Congress  at  the 
very  next  session,  as  we  believe  that  it  will  insure  for  all  future  time 
absolutely  the  present  favorable  state  of  Nicaragua  and  will  do  more 
to  encourage  capital  in  the  development  of  that  great  country  than 
any  other  one  thing  that  can  be  done. 

I  am  going  to  refer  briefly  to  the  conditions  of  that  treaty,  as 
follows : 

The  pending  treaty  between  the  United  States  and  Nicaragua 
gives  to  the  United  States  important  naval  bases — that  is,  Little  and 
Great  Corn  Islands  on  the  eastern  coast  of  Nicaragua  and  Fonseca 
Bay  on  the  western  coast.  This  latter  bay  is  the  only  available  port 
or  harbor  between  California  and  Panama  on  the  Pacific  coast.  At 
least,  it  can  be  seen  that  these  two  bases  furnish  a  means  of  defense 
to  the  eastern  and  western  approaches  to  the  Panama  Canal.  In 
addition,  the  United  States  obtains  exclusive  right  to  the  only  re- 


PBOCEEDINGS.  261 

maining  interoceanic  canal  route  on  the  continent,  and  even  though 
the  necessity  might  not  arise  for  another  canal,  nevertheless  our  in- 
vestment in  Panama  of  $500,000,000  is  safeguarded  by  acquiring  this 
alternative  route  for  $3,000,000. 

The  psychological  and  moral  influence  created  by  these  acquired 
rights  will  have  a  tremendous  effect  in  affording  all  foreign  investors 
alike  the  economic  and  political  stability  necessary  for  the  develop- 
ment of  the  vast  natural  resources  in  Nicaragua. 

This  treaty  has  been  approved  by  both  of  our  political  parties.  It 
creates  no  entangling  alliance.  It  does  not  establish  a  dangerous 
precedent,  because  it  is  simply  a  purchase  and  sale  of  something  that 
no  other  country  has. 

It  should  not  be  considered  as  transgression  on  sovereignty,  because 
it  will  pacify  revolutionary  tendencies  and  furnish  a  firm  foundation 
for  independence  and  democratic  government,  contrary  to  conditions 
under  the  old  regimes  which  so  often  invited  interference. 

Because  of  the  geographical  position  of  Nicaragua,  in  the  very 
heart .  of  Central  America,  whatever  is  done  there  will  radiate  its 
influence  throughout  the  adjacent  Republics,  and  we  believe  for  these 
reasons,  as  well  as  for  very  many  others  which  might  be  cited  and 
which  it  is  useless  to  refer  to  here,  that  these  treaties  should  be 
adopted  at  the  very  next  session  of  the  United  States  Congress,  and 
that  all  of  us  Americans  who  have  any  influence  with  our  Represen- 
tatives should  endeavor  to  explain,  as  far  as  lies  within  our  power, 
the  advantages  which  will  accrue  by  the  adoption  of  this  treaty  not 
only  to  Nicaragua  but  to  the  United  States  and  to  all  of  its  com- 
mercial and  financial  interests  as  well. 

We  have  also  referred  in  this  report  to  the  desirability  of  an 
amendment  to  the  United  States  national  banking  laws,  which  shall 
provide  that  banks  be  permitted  to  subscribe,  within  a  certain  limited 
specified  proportion  of  their  capital,  in  the  stock  of  banks  located  in 
foreign  countries.  At  the  present  time  banks  with  a  capital  of  a 
million  or  more  dollars  may  establish  branches  in  foreign  countries. 
This  provision,  therefore,  naturally  excludes  all  banks  having  less 
than  a  million  dollars  capital  from  participating  in  the  benefits  of 
a  foreign  branch,  which  is  a  wise  provision  of  the  law.  But  some 
of  us  are  of  the  opinion  that  if  the  law  could  be  so  modified  that  a 
certain  reasonable  percentage  of  capital  and  surplus  might  be  in- 
vested in  foreign  banks,  that  a  number  of  banks  located  throughout 
this  country  might  be  willing  to  participate  to  a  certain  extent  in 
the  establishment  of  banks  in  foreign  countries.  By  this  means 
they  would  not  run  the  great  risk  which  might  be  incurred  by  the 
establishment  of  a  branch  bank  and  by  entrusting  to  the  manager 
thereof  the  entire  resources  of  the  parent  bank.  By  this  proposed 


262  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

amendment  the  risk  would  be  so  divided  by  the  taking  of  an  interest 
in  various  banks  located  at  different  points  that  I  believe  it  would 
appeal  to  the  patriotism  and  business  acumen  of  nearly  all  the  bank- 
ers of  this  country. 

Having  finished  the  outline  of  the  report  of  Nicaragua,  I  desire, 
Mr.  Chairman,  to  express  to  you  my  appreciation  of  the  opportunity 
which  your  kind  invitation  has  afforded  me  of  participating  in  the 
Conference  which  has  been  held  here  during  this  week.  I  also  wish 
to  express  the  appreciation  of  the  city  of  New  Orleans,  the  second 
largest  port  in  the  Western  Hemisphere,  of  the  motives  which  have 
actuated  you  in  calling  this  Conference,  for  we  of  New  Orleans  feel 
that  whatever  good  may  come  of  it — and  we  believe  great  good  will 
result — the  city  of  New  Orleans  will  probably  be  the  greatest  benefi- 
ciary of  all  of  the  cities  of  the  country.  We  believe  that,  because  we 
are  in  the  closest  proximity  to  all  of  the  Central  American  States  and 
to  all  of  the  South  American  countries  lying  on  the  west  coast.  We 
are  some  five  hundred  or  six  hundred  miles  nearer  to  the  canal  than  the 
city  of  New  York ;  we  are  several  thousand  miles  nearer  to  Chile  and 
Boliva  and  Peru  than  either  San  Francisco  or  New  York ;  and  we  have 
this  additional  advantage,  that  the  city  of  New  Orleans  possesses  pub- 
licly owned  wharf,  terminal,  and  warehouse  facilities,  which  enable  it 
to  give  cheaper  docking  and  warehouse  privileges  than  any  other  city 
in  the  country.  In  other  words,  a  steamship  or  railroad  line  can 
come  to  New  Orleans  at  any  time  and  obtain  identically  the  same 
privileges  which  any  other  railroad  company,  however  long  it  may 
have  been  there,  or  any  steamship  line,  however  many  years  it  may 
have  touched  at  that  port,  can  possibly  receive.  We  are,  however, 
Mr.  Chairman,  opposed  to  government-owned  ships.  We  of  New 
Orleans  feel  that  it  will  be  vastly  more  advantageous  to  the  com- 
merce of  the  whole  country  if  the  establishment  of  a  merchant 
marine  could  be  done  by  private  enterprise  rather  than  by  govern- 
ment ownership.  We  will  not  say  we  do  not  believe  that  perhaps 
some  compromise  between  the  two  is  feasible,  but  we  feel,  as  we  have 
had  reason  to  feel,  that  the  establishment  and  operation  of  lines  of 
ships  by  the  government  will  lead  to  the  ever-recurring  weakness  of 
our  form  of  government,  namely,  constant  logrolling  and  efforts  to 
have  the  ships  leave  from  a  particular  port,  and  the  port  having  the 
greatest  influence  in  Congress  naturally  will  get  the  ship  line.  We 
believe  that  government  assistance  is  absolutely  necessary  to  the 
establishment  of  a  merchant  marine.  We  do  not  believe  that  capital 
can  be  procured  for  it  without  government  assistance,  because  cap- 
ital will  not  make  the  investment  unless  it  is  assured  of  a  reasonable 
return.  And  while  we  realize  that  the  question  of  subsidies  is  more 
repugnant  to  our  political  parties  than  to  their  individual  members, 


PROCEEDINGS.  263 

yet,  although  frequently  parties  rather  misunderstand  and  misinter- 
pret the  views  of  the  general  public,  they  very  often  tend  to  mold 
those  views. 

In  my  intercourse  with  peopie  at  large  I  find  in  their  desire  for  the 
establishment  of  a  merchant  marine  no  very  decided  opposition  to 
its  being  placed  upon  some  basis  by  somebody,  or  to  a  subsidy  that 
will  enable  it  to  be  a  paying  enterprise,  or  at  least  enable  it  to  be 
established ;  and  I  believe  it  is  along  some  such  line  that  we  shall  be 
compelled  to  establish  eventually  our  merchant  marine. 

I  thank  you  very  much  for  the  courtesies  which  we  have  received 
here,  and  for  the  opportunity  of  saying  a  word  to  you  at  this  time. 
[Applause.] 

Secretary  McADOo.  The  Secretary  of  State  desires  to  say  a  word 
to  the  audience. 

Secretary  BRYAN.  MR.  CHAIRMAN  AND  GENTLEMEN,  I  have  asked 
the  Secretary  of  the  Treasury  to  allow  me  to  say  a  word  in  regard  to 
this  treaty.  I  need  not  tell  you  that  it  is  a  matter  in  which  the  de- 
partment with  which  I  have  the  honor  to  be  connected  has  been 
deeply  interested.  And  I  desire  to  add  just  this  word,  which  prob- 
ably could  come  more  appropriately  from  this  Government  than 
from  the  committee. 

It  has  been  suggested  that  this  treaty  with  Nicaragua  is  in  some 
way  antagonistic  to  the  interests  of  other  Central  American  Re- 
publics. When  we  learned  that  there  was  uneasiness  lest  the  treaty 
might  interfere  with  the  rights  of  adjoining  countries,  we  gladly 
stated  that  we  would  amend  this  treaty  so  that  it  would  specifically 
provide  that  none  of  its  terms  should  in  any  way  affect  the  rights 
of  other  countries  of  Central  America.  [Applause.]  We  did  not 
regard  this  amendment  as  necessary,  because  nothing  that  Nicaragua 
and  the  United  States  could  do  by  treaty  could  possibly  affect  the 
rights  of  any  countries  not  parties  to  the  treaty,  but  in  order  to 
contribute  to  a  sense  of  security  we  have  been  very  glad  to  offer  this 
assurance,  and  we  have  done  it  with  the  approval  of  Nicaragua.  You 
will  find,  when  the  treaty  is  ratified,  that  it  will  contain  an  amend- 
ment that  will  specifically  declare  that  no  other  country  is  to  be  in 
any  way  injured  by  any  of  the  rights  therein  conferred;  and  we 
have  gone  further  and  said  to  Costa  Rica  that  we  are  perfectly 
willing  to  make  a  treaty  with  her,  purchasing  an  option  on  her 
interest  in  the  canal  route,  just  as  we  are  purchasing  an  option  from 
Nicaragua.  And  we  have  also  stated  to  Honduras  and  to  Salvador 
that  we  shall  be  pleased  to  make  with  them  arrangements  for  a  lease 
of  land  for  a  naval  base  similar  to  that  made  with  Nicaragua.  The 
lease  with  Nicaragua  gives  us  all  the  land  we  need  for  a  naval  base 


264  PAN  AMERICAN   FINANCIAL   CONFERENCE. 

upon  the  shore  adjacent  to  Nicaragua,  but,  in  order  to  show  our  en- 
tire impartiality,  we  are  perfectly  willing  to  treat  with  all  adjoining 
nations  in  exactly  the  same  spirit  and  upon  the  same  terms,  and  we 
want  them  all  to  understand  that  nothing  that  we  do  with  any  of 
them  is  at  all  prejudicial  to  their  interests  as  they  are  related  to  each 
other ;  that  we  shall  be  more  than  pleased  to  have  them  all  confer  and 
consult  with  each  other  about  all  matters  that  affect  the  welfare  of 
Central  America.  [Long  applause.] 

Panama  (Dr.  Arjona) :  Mr.  Chairman  and  gentlemen,  the  Panama 
committee,  whose  chairman  1  had  the  honor  to  be,  agreed  yesterday 
that  Mr.  Penfield  should  explain  to  you  what  had  been  done  at  our 
meetings.  His  absence  imposes  upon  me  the  task  of  giving  you  an  idea 
of  our  work.  All  questions  relating  to  the  trade  and  commerce,  the 
fiscal  and  economic  conditions  of  Panama — and  they  have  been  of 
great  moment — were  considered  by  the  Group  Conference  Committee 
in  a  broad  and  high  spirit  of  justice.  The  distinguished  American 
representatives  who  shared  our  labors  gave  proof  of  lofty  purposes, 
which  we  deeply  appreciate.  It  only  remains  for  me  to  present  to  the 
Secretary  of  the  Treasury  the  sincere  appreciation  of  my  Government 
and  of  my  people  for  having  afforded  us  the  opportunity  to  place 
our  needs  before  the  Government  of  the  United  States  over  which 
that  great  statesman  Wilson  presides,  ably  assisted  by  the  distin- 
guished Secretary  of  State,  Mr.  Bryan. 

Paraguay  (Mr.  William  Wallace  White)  :  Mr.  Secretary,  the  re- 
port of  the  Paraguayan  committee  has  been  placed  in  the  hands  of 
the  Secretary-General,  by  whom  it  will  doubtless  be  submitted  to  Mr. 
Moore,  and  the  delegation  will  be  glad  to  leave  the  matter  in  the 
hands  of  that  able  gentleman. 

Peru  (Dr.  Alzamora)  :  Mr.  Secretary,  I  have  the  honor  to  submit 
a  few  remarks  on  the  report  of  the  Peruvian  delegation,  which  was 
handed  in  this  morning,  together  with  others,  by  the  different  secre- 
taries of  the  group  conference  committees;  and  I  understand  that 
you  now  have  before  you  a  printed  copy  of  that  report,  and  I  ask, 
in  your  discretion,  that  it  be  acted  upon  favorably. 

The  only  thing  I  have  to  add  to  that  report  and  to  the  memoran- 
dum to  which  it  refers  is  that  the  Peruvian  committee  has  worked 
along  the  lines  wisely  suggested  by  the  Secretary  of  the  Treasury. 
During  all  of  the  time  of  this  session  the  members  of  this  committee 
have  understood  one  another  and  have  harmonized  entirely  with  the 
views  expressed  by  the  Secretary  of  the  Treasury.  They  have  been 
guided  by  a  sentiment  of  common  friendliness,  consideration,  and 
sympathy.  Here  is  the  first  practical  result  of  this  Conference.  It  is 
perhaps  the  most  fundamental  of  all  of  the  results  to  be  expected. 
It  has,  I  think,  also  been  attained  by  the  other  committees. 


PROCEEDINGS.  265 

There  are  a  great  number  of  men  in  this  Republic  who  have  worked 
in  connection  with  those  from  the  other  Republics,  and  we  think  all 
have  been  reciprocally  benefited  and  that  the  sentiment  has  been 
one  of  harmony.  Of  course  this  feeling  will  extend  here  and  abroad 
in  the  Republics  of  Central  and  South  America,  and  it  will  afford 
a  common  link  between  these  peoples,  formerly  so  separated,  which 
will  shortly  tend  to  make  them  more  united.  I  think  another  im- 
pressive and  profound  result  will  arise  from  this  common  under- 
standing between  the  peoples  of  North,  Central,  and  South  America. 
It  has  often  been  said  that  the  best  bargain  is  that  which  gives  equal 
benefit  to  the  two  contracting  parties.  It  has  been  a  rule  so  very 
often  quoted  that  its  force  has  been  lost  in  the  remoteness  of  time, 
so  that  never  in  any  country  or  continent  has  its  observance  been 
possible.  To-day  a  very  notable  thing  occurs.  A  school  of  philoso- 
phers has  proclaimed  the  responsibility  of  promoting,  not  only  prac- 
tically but  theoretically,  this  principle  of  ethics ;  and  this  gathering 
here  is  laying  the  foundations  for  attaining  it.  If  the  beginning  here 
made  produces  in  the  near  future  the  result  to  be  expected,  a  new 
ideal  will  arise  by  which  the  practical  life  of  business  will  harmonize 
with  the  principles  of  justice  and  of  sympathy  and  of  love  among 
men.  [Applause.] 

CONTINUATION  OF  SUMMARY  OF  GROUP  REPORTS. 

Mr.  MOORE.  A  summary  of  the  Peruvian  report  shows  that  it  rec- 
ommends the  adoption  of  a  uniform  monetary  standard  for  all 
American  countries;  the  extension  of  local  banking  facilities;  the 
establishment  of  a  system  of  obtaining  information  as  to  the  finan- 
cial and  business  standing  of  merchants  in  the  various  countries.  It 
also  emphasizes  the  importance  of  a  system  of  arbitration  of  com- 
mercial disputes,  and,  finally,  it  presents  the  question  of  a  merchant 
marine  and  improved  transportation  facilities  as  a  subject  which 
overshadows  all  others  in  importance. 

CONTINUATION  OF  REMARKS  IN  CONNECTION  WITH  GROUP 

REPORTS. 

Salvador  (Dr.  Quinonez) :  Mr.  Chairman  and  gentlemen,  I  have 
nothing  to  add  to  the  subject  of  finances  which  we  have  had  under 
consideration.  Inasmuch,  however,  as  certain  matters  have  been 
treated  here  which  very  closely  bear  upon  our  commercial  interests, 
I  desire  to  manifest  our  acceptance  in  an  indirect  manner  of  the  words 
pronounced  by  the  President  of  the  United  States  in  his  address  of 
welcome,  and  a  few  moments  ago  by  the  Secretary  of  State,  when  he 
remarked  that  all  the  Latin- American  Republics  would  receive  an 
equal  share  of  respect  and  consideration,  no  matter  how  small  they 


266  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

were.  May  I  be  permitted  to  remind  you  that  Salvador  is,  in  point 
of  territory,  the  smallest  of  these,  but  that  she  is  ever  appreciative 
of  the  honors  and  respect  shown  her  by  the  big  nations,  such  as  the 
United  States.  I  take  this  opportunity  to  express  to  the  Government 
of  the  United  States  the  respect  and  consideration  in  which  it  is  held. 

Uruguay  (Dr.  Cosio)  :  Mr.  Chairman  and  gentlemen,  I  desire  to 
say  a  few  words — for  I  do  not  wish  to  tire  you — on  three  points 
touched  on  in  the  program  of  the  Conference,  in  order  to  avoid  what 
may  appear  to  be  a  contradiction  were  no  explanation  made.  Before 
leaving  Uruguay  the  subjects  we  would  take  up  were  determined 
upon  by  the  President  of  the  Republic,  for  although  we  had  not  yet 
received  the  list  of  topics  suggested  for  the  Conference  our  delega- 
tion, nevertheless,  presented  certain  memoranda.  The  Conference 
took  the  form  of  group  committee  meetings  for  each  country  and  of 
two  general  committees,  one  on  transportation  and  the  other  on  uni- 
formity of  laws.  This  circumstance  has  caused  our  committee,  as 
well  as  others,  to  submit  conclusions  at  the  same  time  as  the  special 
committees  presented  their  suggestions ;  and  in  the  case  of  Uruguay 
it  has  happened  that  these  general  committees  have  offered  still 
further  resolutions,  with  the  approval  of  the  Uruguay  delegation. 
This  is  what  I  have  referred  to  as  an  apparent  paradox.  In  effect 
one  of  the  general  committees  acted  first  in  accordance  with  its  own 
ideas,  and  later  with  the  conclusions  arrived  at  in  the  group  com- 
mittees, but  those  resolutions  were  adopted  in  conformity  with  the 
views  and  tendencies  of  the  Uruguay  delegation. 

With  regard  to  inter-American  commercial  relations  the  gov- 
ernment and  people  of  Uruguay  have  decided  to  support  the  prin- 
ciple of  customs  privileges  among  the  countries  of  this  hemisphere. 
By  this  we  mean  that  the  products  at  present  sent  to  foreign  lands 
and  totaling  millions  of  dollars  yearly,  should  find  their  way  pref- 
erably to  American  markets  on  the  basis  of  reciprocity.  The  resolu- 
tion adopted  is  general  in  character,  and  is  an  evidence  of  our  desire 
to  foster  the  idea  of  Pan  Americanism  with  practical  commercial 
results.  Were  it  to  be  otherwise  Pan  Americanism  would  be  merely 
idle  talk.  I  wish  to  call  attention  to  one  of  the  important  conclu- 
sions, namely,  that  responsibility  be  made  the  basis  of  the  many 
commercial  operations  undertaken.  I  am  going  to  beg  the  chairman 
to  allow  Mr.  Rovensky  to  say  a  few  words  on  the  importance  of 
these  propositions,  one  of  which — and  I  deem  it  of  great  value — was 
presented  by  the  Uruguay  committee,  composed  of  the  vice  presi- 
dent of  the  National  City  Bank  of  New  York,  the  first  large  Amer- 
ican bank  to  establish  branches  in  South  America,  and  of  other  no 
less  distinguished  men. 


PROCEEDINGS.  267 

Secretary  McAooo.  Gentlemen,  the  time  has  arrived  when  we 
should  adjourn  in  order  to  meet  the  President.  Immediately  upon 
reassembling  this  afternoon  we  will  begin  where  we  have  left  off  and 
finish.  I  would  suggest  that  we  meet  punctually  at  3  o'clock.  Here- 
tofore we  have  been  allowing  thirty  minutes'  leeway.  We  will  now 
adjourn  until  3  o'clock. 

When  you  arrive  at  the  White  House  I  beg  that  the  foreign  dele- 
gates will  arrange  themselves  in  alphabetical  order  so  that  they  may 
be  presented  in  that  way  to  the  President.  The  American  conferees 
will  kindly  fall  in  immediately  behind  our  foreign  guests  and  be 
thus  introduced  to  the  President. 

(Accordingly,  at  12.15  p.  m.,  the  Conference  adjourned.) 


SEVENTH  SESSION 


SATURDAY  AFTERNOON,  MAY  29,  1915 


269 


SEVENTH  SESSION,  SATURDAY  AFTERNOON,  MAY  29. 


The  Conference  reassembled  at  3.10  p.  m.,  and  was  called  to  order 
by  the  Honorable  William  G.  McAdoo. 

MISCELLANEOUS  BUSINESS. 

The  Secretary-General,  Dr.  ROWE.  I  desire  again  to  call  the  atten- 
tion of  the  delegates  of  the  countries  represented  at  the  Confer- 
ence to  a  request  made  several  days  ago  in  writing  and  repeated  from 
the  platform  that  the  delegates  from  Central  and  South  America 
select  one  of  their  number  to  speak  at  the  banquet  this  evening.  That 
is,  to  have  one  representative  to  speak  for  all  of  the  delegates  repre- 
sented at  this  Conference. 

Dr.  PEARSON.  May  I  answer  that  the  South  and  Central  American 
delegates  have  chosen  the  best  person  possible  to  represent  them, 
namely,  Dr.  Perez  Triana,  who  has  accepted  the  honor  and  the 
pleasure.  [Applause.] 

Secretary  McADoo.  Upon  adjournment  this  morning  Uruguay  had 
the  floor,  and  I  understood  from  the  Uruguayan  delegation  that  you 
wished  Mr.  Eldridge  to  make  a  few  remarks  upon  a  feature  of  your 
report  which  you  had  not  touched  upon.  I  will  therefore  ask  Mr. 
Eldridge  to  speak  for  the  Uruguayan  delegation  now. 

REMARKS  IN  CONNECTION  WITH  GROUP  REPORTS. 

Mr.  H.  E.  ELDRIDGE  (New  York).  Mr.  Chairman  and  delegates  to 
the  Financial  Conference,  the  Uruguayan  delegation  is,  I  think,  as 
well  prepared  to  handle  the  various  subjects  suggested  by  the  Secre- 
tary of  the  Treasury  in  calling  this  meeting  as  any  other  delegation 
could  have  been.  None  of  their  suggestions  was  more  interesting  than 
those  pertaining  to  credits.  They  had  requested  Mr.  J.  E.  Rovensky 
(New  York),  one  of  the  representatives  of  the  United  States  attached 
to  their  group  committee,  to  explain  their  attitude.  As  Mr.  Rovensky 
left  for  New  York  at  two  o'clock  they  have  asked  me  to  make  their 
statement  in  his  stead. 

They  realize  that  the  merchants  of  the  United  States  in  the  course 
of  time  could  perhaps  equip  themselves  for  ascertaining  the  stand- 
ing of  the  various  firms  and  houses  with  which  they  do  business  in 
South  America  as  well  as  the  merchants  of  any  other  country.  But 

271 


272  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

they  feel  that  since  it  is  particularly  desirable  at  this  time  that  the 
best  efforts  should  be  made  promptly  to  put  the  merchants  of  this 
country  in  such  a  position  that  they  may  more  intelligently  deal  with 
the  business  houses  of  South  America  and  Central  America,  it  would 
be  wise  to  urge  upon  the  merchants  of  those  countries  the  wisdom  of 
making  to  the  business  world  of  North  America,  wherever  requested, 
such  statements  of  their  financial  condition  as  will  permit  business  to 
be  more  speedily  transacted.  In  turn,  that  the  merchants  and  firms 
of  Central  and  South  America  shall  be  furnished  with  similar  state- 
ments of  conditions  by  United  States  merchants  whenever  requested. 
They  respectfully  urge  that  this  basis  for  a  quicker  interchange  of 
financial  credit  information  be  adopted  by  all  the  countries. 

I  wish  also  to  remark  that  the  representatives  of  the  United  States 
are  particularly  pleased  with  the  invitation  extended  by  the  delegates 
from  Uruguay  that  members  from  the  United  States  be  requested  to 
visit,  as  their  guests,  the  various  countries  of  Central  and  South 
America  within  the  next  six  months.  I  can  not  emphasize  too  much 
the  value  of  such  a  visit  on  the  part  of  our  business  men.  There  is 
nothing  that  brings  about  a  firmer  or  better  basis  between  the  mer- 
chants of  one  section  with  those  of  another  than  a  close  and  intimate 
personal  acquaintance.  Day  by  day  and  year  by  year  the  merchants 
and  business  men  of  this  country  are  realizing  in  greater  degree  than 
ever  before  how  great  a  part  personality  plays  in  business.  We 
must  learn  to  adapt  ourselves  to  the  methods  and  ways  of  doing 
business  which  those  with  whom  we  seek  to  deal  have  long  adopted 
as  their  standard,  and  they  in  turn  must  bear  with  us  until  we  can 
reach  that  happy  medium  where  we  all  understand  one  another  bet- 
ter than  we  have  ever  done  before.  I  believe  that  this  Conference 
has  accomplished  much  to  bring  about  that  desired  result,  and  I 
am  sure  that  the  foreign  delegates  who  have  honored  us  with  their 
presence  will  go  back  to  their  homes  with  a  much  better  feeling, 
a  much  better  disposition  toward  the  people  of  the  United  States 
than  they  have  ever  had  before.  I  am  well  satisfied,  too — in 
fact  I  know — that  the  representatives  from  the  United  States  have 
words  of  praise  only,  not  merely  on  account  of  the  personality  of 
the  gentlemen  who  have  honored  us  with  their  presence,  but  because 
of  the  high  standards  of  business  life  and  social  life  they  represent. 
I  thank  you.  [Applause.] 

The  Secretary-General,  Dr.  ROWE.  We  did  not  conclude  this  morn- 
ing the  calling  of  the  roll  of  Republics  represented.  The  next  in 
order  is  Venezuela. 

Venezuela  (Dr.  Rincones)  :  Mr.  Chairman  and  gentlemen  of  the 
Conference,  I  have  the  honor  to  present  to  you  the  report  of 
Venezuela.  I  do  not  come  here  to  add  anything  to  what  has  already 


PROCEEDINGS.  273 

been  said  by  the  speakers  who  have  so  ably  discussed  the  subjects 
and  the  program  of  this  Conference  which  has  brought  us  together 
under  the  roof  of  the  Pan  American  Building.  I  came  here  merely 
to  express  once  more  my  gratitude,  not  only  for  the  friendly  and 
very  cordial  reception  tendered  us  by  the  high  officials  of  the  Gov- 
ernment of  this  great  Republic,  but  also  for  the  social  courtesies 
extended  to  us  by  the  people  of  this  beautiful  capital,  which  bears 
with  honor  the  name  of  the  Father  of  his  Country.  [Applause.] 

I  wish  further  to  express  an  ardent  hope  that  the  efforts  of  this 
great  nation  on  behalf  of  closer  relations  with  the  other  independent 
States  of  the  New  World  may  attain  a  real  success  and  bring  about 
closer  fraternal  ties  between  all  the  countries  of  this  hemisphere 
under  the  auspices  of  liberty,  equality,  and  fraternity.  When  this 
end  has  been  attained  posterity  will  say,  "  The  United  States  of 
America  made  possible  the  United  American  States — united  in  the 
bonds  of  friendship  and  common  ideals."  [Applause.] 

GROUP  REPORTS  SUMMARIZED. 

Argentina  (Dr.  Aldao) :  Mr.  Chairman  and  gentlemen  of  the  Con- 
ference, I  have  to  summarize  the  work  of  the  Argentine  Group  Com- 
mittee, and  while  it  probably  would  have  been  wiser  to  use  my  own 
language,  I  shall  nevertheless  try  to  avoid  imposing  upon  your 
patience  and  kindness. 

In  the  first  place,  allow  me  to  express  my  appreciation  to  the 
representatives  of  the  United  States  who  have  been  kind  enough  to 
participate  and  cooperate  so  efficiently  in  the  labors  of  the  Argen- 
tine committee.  I  have  here  its  report,  and  I  will  try  to  summarize 
the  conclusions  to  which  we  have  come. 

The  discussion  centered  upon  the  following  general  headings: 
First,  transportation.  As  the  chief  object  of  maritime  transportation 
will  perhaps  not  be  realized  in  the  very  near  future,  being  in  the 
meanwhile  only  a  cherished  hope,  the  Argentine  Group  Committee, 
secondly,  deems  it  advantageous  to  secure,  if  possible,  cheaper  cable 
communication  between  the  United  States  and  the  Argentine  Ee- 
public.  The  present  rates  are,  in  our  opinion,  rather  high,  from  the 
fact  that  there  does  not  exist  one  single  direct  cable  between  the 
United  States  and  Argentina.  It  is  necessary  to  transmit  our  mes- 
sages to  Argentina  over  more  than  one  line,  which  means  more  than 
one  profit.  For  this  reason  the  Group  Committee  has  suggested  that 
your  government  and  perhaps  those  of  other  countries  interested 
cooperate,  in  order  to  get  as  soon  as  possible  cheaper  communication 
of  this  kind. 

The  third  point  treated  refers  to  banking  facilities,  or,  rather,  to 
increased  banking  facilities.  As  the  report,  in  my  opinion,  is  ex- 
98257°— 15 18 


274  PAN  AMERICAN   FINANCIAL   CONFERENCE. 

tremely  complete  upon  that  subject,  I  think  that  a  quotation  from  it 
will  save  your  time.    I  therefore  quote  as  follows : 

Resolved,  That  this  committee  favors  the  establishing  of  such  banking 
facilities  between  the  United  States  and  the  Argentine  Republic  as  will  affect 
a  more  intimate  and  reciprocal  relation  than  now  exists,  based  upon  mutual 
cooperation  and  profit. 

A  matter  especially  treated  by  our  committee  refers  to  trading 
facilities.  We  have  considered  in  the  first  instance  that  it  is  useless 
to  make  an  effort  in  regard  to  transportation,  since  the  import  trade 
in  Argentina  is  not  in  the  hands  of  the  Argentine  people.  The 
Argentines  devote  their  activity,  energy,  and  capacity  mainly  to 
the  cattle  industry  and  to  agriculture,  and  the  importation  of  goods 
is  in  the  hands  of  foreigners,  especially  those  of  English,  German, 
French,  Italian,  or  Spanish  nationality.  Therefore  it  is  quite  natural 
that  the  foreign  establishments  in  Argentina  generally  prefer  to  treat 
with  their  native  countries.  This  is  the  principal  reason  why  the 
interchange  between  the  United  States  and  Argentina  has  not 
reached  the  high  degree  it  really  deserves;  although  the  United 
States  produces  the  same  things,  using  the  best  materials,  manufac- 
tured in  the  best  manner,  and  has  all  the  conditions  necessary  to 
compete  successfully  with  the  European  manufacturers.  To  get 
the  same  result  it  will  be  necessary  for  Americans  to  follow  this 
method.  The  United  States  should  establish  expositions,  show- 
rooms, and  boards  of  sale  where  American  goods  can  be  exhibited, 
and  in  this  I  share  the  opinion  of  my  colleagues.  We  have  talked 
at  length  on  this  point,  and  have  agreed  that  as  soon  as  American 
manufactured  goods  are  known  there  will  be  an  active  demand  for 
them  in  the  Argentine  market. 

Finally  the  Group  Committee  gave  much  though  to  a  point  con- 
sidered essential.  This  is  the  question  of  litigation  that  may  arise 
between  citizens  or  residents  of  the  United  States  and  of  the  Argen- 
tine. The  ordinary  recourse  is  to  appeal  to  the  courts,  to  submit  to 
expensive,  long  drawn-out  proceedings  and  delays,  necessitating  the 
employment  of  lawyers.  We  believe  that  international  trade  in 
order  to  be  increased  requires  that  all  those  difficulties  be  avoided, 
the  expense  saved,  and  no  lawyers  employed.  I  say  this,  although  I 
am  a  lawyer.  [Laughter.]  To  attain  a  result  so  interesting  there  is 
only  one  means.  That  point  has  been  thoroughly  considered,  and 
our  committee — taking  advantage  of  the  fact  that  the  committee  of 
the  United  States  Chamber  of  Commerce  was  meeting  at  Washing- 
ton— decided  to  approach  that  important  body  on  the  subject,  and 
Mr.  Vanderlip,'  of  our  committee,  was  delegated  to  confer  with  the 
Chamber  of  Commerce  of  the  United  States.  We  are  extremely 
pleased  to  inform  you  that  the  Chamber  of  Commerce  has  decided  to 
assist  us  in  every  way  possible  in  the  effort  to  secure  f;hat  very  im- 


PROCEEDINGS.  275 

portant  end.  Arbitration,  we  conceive,  is  the  only  method  that 
will  solve  disputes  arising  between  merchants  of  different  countries. 
Of  course,  such  an  idea  can  not  be  set  on  foot  and  results  attained 
immediately,  but  we  are  going  ahead  with  the  matter,  and  we  wish 
to  inform  you  that  next  Saturday  a  committee  formed  by  Mr.  Fahey, 
president  of  the  United  States  Chamber  of  Commerce,  Mr.  Yanderlip, 
and  I  are  to  meet  in  New  York  in  order  to  try  to  perfect  a  plan  which 
will  be  submitted  to  the  boards  of  trade  in  both  countries,  and  we  hope 
that  out  of  it  a  definite  project  may  be  devised  to  enable  the  merchants 
in  the  United  States  and  in  Argentina  to  solve  any  differences  they  may 
have.  [Applause.]  We  hope  it  will  be  the  first  proof  of  the  benefit 
to  arise  from  this  splendid  Conference,  due  to  your  efficient  guidance, 
Mr.  Secretary. 

I  think,  in  the  main,  this  is  the  result  of  the  work  of  the  Argentine 
committee.  In  conclusion,  I  wish  again  to  thank  you  for  having 
given  us  this  opportunity  of  meeting  and  of  knowing  and  becoming 
known  to  you.  [Prolonged  applause.] 

Secretary  McADOO.  The  Honorable  John  Bassett  Moore  will  now 
finish  summarizing  the  reports  not  covered  by  him  this  morning. 

Mr.  MOORE.  Mr.  Chairman,  I  will  first  take  up  the  report  of 
Ecuador,  which  has  come  in  since  the  morning.  It  refers  to  the  sub- 
ject of  public  finance,  the  monetary  situation  in  that  country,  the  pres- 
ent banking  situation,  and  the  subject  of  financing  public  and  private 
improvements.  It  also  treats  of  the  extension  of  inter- American 
markets,  of  the  improvement  of  merchant  marine  and  transportation 
facilities,  and  of  better  regulations  for  commercial  travelers  and  their 
samples. 

I  referred  this  morning  to  the  previous  very  full  memorandum 
presented  by  the  Ecuadorian  delegation  to  the  Secretary  of  the  Treas- 
ury at  the  opening  of  the  Conference. 

The  next  report  which  I  have  to  summarize  is  that  of  Honduras, 
which  deals  first  with  the  public  revenues  and  expenditures  as 
affected  by  the  war  in  Europe,  the  measures  or  remedies  to  meet 
the  situation,  and  the  possibilities  of  international  cooperation. 
It  deals  also  with  the  monetary  and  banking  situation,  and  recom- 
mends the  establishment  of  branch  banks  and  direct  exchange.  It 
also  treats  of  the  financing  of  public  improvements — first,  by  national 
loans,  and,  secondly,  by  provincial  or  State  loans;  likewise,  the 
financing  of  private  enterprises,  including  railways,  tramways,  and 
electric-lighting  companies.  It  recommends  an  improvement  in  the 
laws  relating  to  trade-marks  and  the  classification  of  merchandise, 
and  urges  the  extension  of  inter- American  markets  by  more  liberal 
credits,  acceptances,  and  discounts,  and  the  employment  of  the  dollar 


276  PAN  AMERICAN   FINANCIAL   CONFERENCE. 

exchange.  It  strongly  recommends  the  improvement  of  transporta- 
tion facilities,  of  the  postal  service,  and  of  the  parcels  post.  Hondu- 
ras, it  is  stated,  will — in  the  manner  indicated  in  its  report — stand 
ready  to  grant  subventions  to  steamship  lines.  It  indorses  the  Argen- 
tine proposition  as  to  the  arbitration  of  commercial  disputes. 

The  next  report,  which  has  just  come  into  my  hands,  is  that  of 
Paraguay.  It,  too,  deals  with  the  internal  monetary  situation,  recom- 
mends the  improvement  of  banking  facilities,  points  out  the  need 
of  foreign  capital  for  the  development  of  Paraguayan  resources, 
showing  the  existence  there  of  a  profitable  field  for  investment  of 
capital  from  the  United  States.  It  strongly  urges  the  establishment 
of  a  system  of  obtaining  information  as  to  the  financial  and  business 
standing  of  merchants  of  the  countries  concerned  and  also  indorses 
the  proposal  for  the  establishment  of  a  system  of  arbitration  for 
commercial  disputes. 

REMARKS  IN  CONNECTION  WITH  GROUP  REPORTS. 

Dr.  VELAZQUEZ  (Paraguay).  Mr.  Secretary,  ladies,  and  gentlemen, 
we  find  nothing  to  add  to  nor  to  qualify  in  the  able  summary  made 
by  Mr.  Moore,  unless  it  be  to  emphasize  the  point  that  Paraguay  will 
see  with  much  satisfaction  the  establishment  there  of  a  branch  of  a 
North  American  bank,  and  gives  renewed  assurance  to  the  investors 
of  this  country  that  their  capital  will  find  there  sound  investment  and 
large  and  certain  returns. 

The  delegation  of  Paraguay  avails  itself  of  the  opportunity  afforded 
by  this  last  general  session  of  the  Financial  Conference  to  express 
the  sincere  pleasure  it  has  derived  from  its  participation,  modest 
though  it  has  been,  in  the  great  work  for  which  the  Conference  has 
been  convened. 

If  the  magnitude  of  the  task,  even  when  undertaken  competently 
and  with  tenacity,  is  beyond  what  human  endeavor  could  fully  ac- 
complish in  the  short  term  dedicated  to  this  labor,  it  is  not  to  be 
doubted  that  the  final  result  will  be  both  extensive  and  beneficent. 

A  mere  glance  over  the  field  covered  makes  it  clear  that  the  subjects 
discussed  and  the  ideas  advanced  lie  at  the  foundation  of  that  monu- 
ment which  the  American  Continent  is  endeavoring  to  build  for  the 
prosperity  and  welfare  of  all. 

We  can  not  conclude  without  expressing  our  special  appreciation 
of  the  happy  inspiration  of  the  honorable  Secretary  of  the  Treasury 
in  placing  in  friendly  and  intimate  contact  the  North  American 
experts  and  the  delegates  from  the  other  Republics,  an  act  which 
will  without  any  doubt  continue  to  yield  fruit  in  every  country  con- 
cerned, through  the  perfect  knowledge  obtained  of  conditions  in 
financial  and  economic  matters. 


PROCEEDINGS.  277 

Our  last  words  could  not  be  other  than  to  express  our  cordial 
thanks  for  all  the  consideration  and  good  will  found  among  the 
members  of  this  Conference  and  for  the  unbounded  courtesy  and 
hospitality  extended  to  us  by  the  Government  and  the  people  of  the 
United  States,  for  whose  continued  prosperity  and  everlasting 
greatness  we  formulate  our  most  sincere  wishes.  [Applause.] 

GROUP  REPORTS  SUMMARIZED. 

Mr.  MOORE.  The  next  report  is  that  of  Peru,  which  recommends 
the  establishment  of  branches  of  American  banks  in  that  country 
and  advises  that  steps  be  taken  by  the  United  States  financial  in- 
stitutions to  facilitate  the  placing  of  loans  in  South  America.  It 
urges  uniform  customs  regulations;  the  adoption  of  methods  in 
the  United  States  to  place  the  resources  of  the  country  at  the 
disposal  of  foreign  commerce;  the  establishment  of  bonded  ware- 
houses and  the  issuance  of  receipts  or  warrants  which  will  be  ac- 
cepted by  banks  as  security  for  loans ;  the  establishment  of  exchange 
on  the  dollar  basis;  and  the  appointment  of  an  international  com- 
mission to  deal  with  the  various  questions  mentioned.  It  also  treats 
of  the  need  of  improved  transportation  facilities,  and  again  indorses 
the  proposal  for  the  arbitration  of  commercial  disputes.  It  finally 
recommends  that  the  countries  which  have  not  as  yet  done  so  adopt 
pure  food  and  drug  laws. 

In  connection  with  this  recommendation  the  report  asks  special 
attention  to  an  accompanying  memorandum  signed  by  Mr.  Eduardo 
Higginson,  the  Peruvian  delegate,  and  approved  by  Dr.  Isaac 
Alzamora,  chairman,  in  which  information  is  given  regarding  the 
present  situation  in  Peru,  the  desirability  of  investments  there. 

It  touches  upon  the  possibility  that  when  the  present  conflict  in 
Europe  is  over  it  may  be  necessary  to  exercise  vigilance  and  to  be 
energetic  here  unless  trade  should  tend  to  revert  to  former  channels. 
No  doubt  the  American  merchants  will  be  alive  to  that.  This  memo- 
randum recommends  the  establishment  of  American  banks  in  Peru, 
also  of  branches  of  American  manufactories  and  the  formation  of 
agricultural,  land,  and  real  estate  banks,  the  want  of  which  is  greatly 
felt  in  Peru.  It  refers  to  the  importance  of  improving  domestic  as 
well  as  foreign  transportation,  of  the  establishment  of  direct  pas- 
senger service  under  the  American  flag  to  Callao  arranged  so  as  to 
avoid  quarantine  difficulties.  It  also  urges  the  reduction  of  cable 
rates  and  points  out  the  need  of  high-power  wireless  stations  in  Peru. 

In  conclusion,  it  states  that  perhaps  the  measure  of  greatest  neces- 
sity is  that  which  deals  with  the  condition  of  foodstuffs  coming  into 
Peru.  The  laws  of  the  United  States  governing  this  matter  are  very 
strict,  and  properly  so,  and  therefore  it  recommends  that  the  benefit ' 


278  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

of  the  pure  food  and  drug  laws  be  extended  to  importation  and 
exportation  in  all  Pan  American  countries. 

The  last  report  which  I  have  to  summarize  is  that  of  Venezuela. 
It  deals  with  the  subjects  of  merchant  marine  and  ocean  trans- 
portation, and  of  improved  postal  facilities;  and  a  summary  is 
given  of  Venezuelan  trade.  It  urges  the  extension  of  inter- American 
markets  by  the  establishment  of  more  liberal  credits:  It  indorses  the 
project  for  the  arbitration  of  commercial  disputes.  It  advises  that 
our  newspapers  and  periodicals  should  more  rigidly  examine  mate- 
rial that  comes  to  them,  particularly  that  which  contains  an  element 
of  liveliness,  based  upon  supposed  troubles  that  do  not  actually  exist. 
[Applause.]  It  treats  of  the  desirability  of  the  development  of 
public  utilities,  railroads,  and  public  improvements.  Much  infor- 
mation is  given  as  to  the  monetary  system  of  Venezuela  and  to  the 
present  state  of  the  public  debt. 

Secretary  McADOO.  Gentlemen,  that  concludes  the  group  reports, 
and  I  would  like  to  ask  the  delegates  if  they  will  be  good  enough  to 
supply  copies  of  these  reports  in  Spanish,  because  it  will  facilitate 
the  work  of  publication. 

I  would  now  like  to  call  for  the  report  of  the  General  Committee  on 
Transportation  and  Communication.  Who  will  make  that  report  ? 

COMMITTEE  ON  TRANSPORTATION  REPORT. 

Dr.  PEARSON  (Argentina).  Mr.  Secretary  and  gentlemen,  having 
been  honored  with  the  chairmanship  of  this  very  important  com- 
mittee, I  will  only  say  a  very  few  words,  as  I  have  handed  in  the 
report  signed  by  twenty  of  the  twenty-two  members  who  composed 
the  committee.  Unfortunately  the  other  two  could  not  sign  it,  as 
they  had  to  go  to  New  York  yesterday  before  it  was  ready. 

It  has  been  the  unanimous  opinion  of  all  of  us — North  Americans 
and  South  Americans — that  there  is  absolute  necessity,  in  the  inter- 
ests of  commerce  and  for  a  better  knowledge  of  each  other,  that  some 
method  be  arrived  at  for  the  establishment  of  fast  steamship  com- 
munication between  North  and  South  America.  At  our  first  meeting 
we  thought  it  might  be  convenient  for  the  South  American  Republics 
present  at  this  meeting  to  constitute  themselves  into  a  commission 
so  as  to  have  more  liberty  to  formulate  their  opinions.  This  com- 
mittee was  subdivided  because  of  the  east  and  west  coasts.  The  full 
committee  met  and  presented  a  very  brief  report,  recommending  that 
the  president  of  this  Conference  should  appoint  a  permanent  com- 
mission to  bring  about  the  best  means  of  attaining  the  desired  end. 

It  is  useless  to  go  on,  because  everybody  knows  that  we  want  fast 
steamers,  and  fast  steamers  are  the  basis  and  the  foundation  of  bank- 


PROCEEDINGS.  279 

ing,  trading,  and  all  sorts  of  commercial  relations.  [Applause.] 
It  is  useless — I  mean,  it  is  a  little  premature — for  us  to  try  to  estab- 
lish commercial  relations,  if  we  find  we  can  not  get  there.  The  first 
thing  is  to  get  there,  and  then  business  will  follow. 

•  Mr.  Chairman,  I  do  not  wish  to  leave  this  platform  before  saying 
one- word  to  thank  you  very  specially  for  having  invited  us  in  this 
friendly  and  informal  fashion,  because  we  have  met  here  as  if  we 
were  all  sons  of  one  house,  belonging  to  the  same  group ;  and  I  am 
sure  it  would  be  a  great  pleasure  to  all  of  us  Latin  Americans  if  in 
a  very  short  time  we  could  have  a  visit  from  you,  Mr.  Secretary 
[applause] ,  in  order  that  you  could  see  with  your  own  eyes  what  our 
countries  are  worth,  and  then  have  a  good  opportunity  of  formu- 
lating some  project  which  would  be  of  mutual  interest  and  advantage 
to  all.  [Applause.] 

Secretary  McAooo.  I  will  now  ask  the  Secretary- General  if  he  will 
read  the  Report  on  Transportation. 

The  Secretary-General,  Dr.  HOWE: 

REPORT  OF  THE  GENERAL  COMMITTEE  ON  TRANSPORTATION  AND 

COMMUNICATION. 

Your  committee  on  transportation  and  communication  resolved 
that  a  subcommittee  to  be  composed  of  one  member  from  each  of  the 
South  American  countries  represented  on  the  general  committee, 
confer  and  report  back  any  plan  or  plans  for  the  inauguration  of 
more  regular,  rapid,  frequent,  and  .up-to-date  communication  be- 
tween these  countries  and  the  United  States  which  seemed  to  them 
practical  of  accomplishment. 

This  subcommittee  composed  of  Messrs.  Aldao,  Cavalcanti,  Gon- 
zales,  Alzamora,  Cosio,  and  Yergara,  submitted  two  reports,  one 
signed  by  Messrs,  Aldao,  of  Argentina;  Cavalcanti,  of  Brazil;  and 
Cosio,  of  Uruguay ;  and  the  other  by  Mr.  Vergara,  of  Chile. 

These  two  reports  are  designated  respectively  as  "A"  and  "B." 

Report  "A,"  submitted  to  the  general  committee  on  transportation 
and  communication  by  Messrs.  Aldao,  Cavalcanti,  and  Cosio: 

The  Pan  American  Financial  Conference  begs  to  suggest  the  advisability  of 
calling  for  bids  not  later  than  December  31,  1915,  for  the  establishment  of  a 
regular  line  of  fast  mail  steamers  between  United  States  ports  and  Rio  de 
Janeiro,  Montevideo,  and  Buenos  Aires,  under  the  following  conditions: 

Steamers  to  have  at  least  10,000  tons  displacement;  to  make  at  least  two  trips 
per  month,  with  accommodations  for  at  least  150  first-class  cabin  passengers; 
with  refrigerating  arrangements ;  and  to  complete  the  trip  between  United  States 
ports  decided  upon  and  Buenos  Aires,  pier  to  pier,  in  not  more  than  15  days. 

Bidders  to  state  the  compensation  demanded,  and  the  period  of  the  contract. 

As  part  of  the  compensation  for  services  rendered,  said  vessels  to  be  exempt 
for  five  years  from  all  fiscal  charges  in  the  respective  countries  and  to  enjoy 
all  facilities  granted  to  any  other  vessels. 


280  PAN  AMERICAN   FINANCIAL   CONFERENCE. 

Bids  to  be  acted  upon  within  three  months  and  preference  to  be  given,  all 
other  conditions  being  similar,  to  whoever  will  provide  for  earlier  inauguration 
of  the  service. 

The  Governments  of  the  respective  countries  to  agree  upon  the  proportionate 
charges  to  be  paid  by  each  and  upon  all  other  details. 

(Signed)  ALDAO. 

CAVALCANTI. 
Cosio. 

Report  "  B,"  submitted  to  the  general  committee  on  transportation 
and  communication  by  Mr.  Yergara,  of  Chile : 

In  the  conference  of  to-day  of  the  subcommittee  the  Minister  of  Finance  of 
Uruguay,  Dr.  Cosio ;  the  delegate  of  Argentina,  Dr.  Aldao ;  and  the  undersigned 
delegate  of  Chile  formulated  three  separate  projects  for  the  establishment  of 
fast  maritime  transportation  between  the  interested  countries. 

In  view  of  this  fact  and  of  the  circumstance  that  the  delegates  of  Colombia, 
Venezuela,  Panama,  and  the  Republics  of  Central  America  had  expressed  in  the 
general  meeting  of  the  conference  that  their  respective  countries  for  the  present 
have  no  interest  in  the  proposed  question  it  was  agreed : 

(a)  That  there  should  be  only  two  lines  of  fast  steamers;  one  to  serve  the 
ports  of  Brazil,  Uruguay,  and  the  Argentine  Republic,  and  the  other  to  serve 
Ecuador,  Peru,  and  Chile. 

(&)   That  the  conditions  affecting  said  lines  are  different. 

(c)  That  the  delegates  from  countries  on  the  east  coast  of  South  America 
and  the  delegate  from  Chile  should  present  their  views  on  the  question  sepa- 
rately. 

The  delegate  of  Peru,  Dr.  Alzamora,  stated  that,  notwithstanding  he  concurs 
in  the  proposition  of  the  delegate  of  Chile,  he  is  unable  to  sign  this  report,  be- 
cause he  has  no  instructions  from  his  Government,  having  been  accredited  to 
the  conference  by  cable. 

The  delegate  of  Ecuador,  Dr.  Gonzales,  approves  the  general  idea  of  the 
Chilean  delegate,  but  he  can  not  sign  the  report,  lacking  the  necessary  authoriza- 
tion from  his  Government. 

The  delegate  of  Chile  is  of  opinion  that  the  conference  may,  nevertheless, 
recommend  to  the  interested  Governments  that  the  need  for  a  fast  maritime 
transportation  service  between  the  ports  of  South  and  North  America  may  be 
supplied  as  follows: 

(1)  By  the  organization  of  a  large  company,  subscription  to  the  capital  of 
which  may  be  made  by  the  public,  the  balance  of  the  stock,  if  any,  to  be  taken 
by  the  Government  of  the  United  States  and  the  Governments  of  those  Latin- 
American  Republics  interested  in  a  proportion  to  be  agreed  upon. 

(2)  The  company  to  be  incorporated   under   the  New  York  laws,  but  the 
steamers  to  be  registered  in  the  different  countries  in  proportion  to  the  capital 
subscribed,  and  shall  fly  the  flag  of  said  country. 

(3).  For  the  purposes  of  customs  laws  the  steamers  to  be  considered  as  of 
the  nationality  of  the  port,  except  the  coastwise  trade,  in  those  countries  where 
that  trade  is  reserved  for  nationals. 

(4)  The  vessels  to  fulfill  certain  conditions,  e.  g.,  minimum  tonnage  of  5,000 
tons;  minimum  speed  of  16  miles  per  hour. 

(5)  The  board  of  directors  shall  be  composed  of  representatives  appointed  by 
the  respective  countries  in  proportion  to  the  capital  subscribed. 

(6)  The  payment  of  the  capital  subscribed  may  be  made  in  cash  or  by  trans- 
fer of  vessels  belonging  to  the  Government  subscribing  provided  said  vessels 
are  suitable. 

(Signed)  YERGARA. 

The  transportation  committee  recognizes  the  paramount  importance 
of  the  transportation  question  and  believes  that  the  establishment  of 
improved  regular  facilities  is  an  imperative  necessity  to  the  expansion 
of  the  commercial  and  financial  relations  between  the  United  States 
and  the  Republics  of  South  and  Central  America. 


PBOCEEDINGS.  281 

The  committee  further  realizes  the  complexity  of  the  problems 
which  the  subject  involves  and  recommends  as  an  aid  to  their  solution 
the  reports  of  the  subcommittees  representing  the  east  and  west 
coasts  of  South  America,  with  its  approval  of  the  general  suggestions 
contained  in  such  reports. 

It  earnestly  recommends  the  serious  consideration  of  such  sugges- 
tions as  practical  propositions  tending  toward  a  prompt  solution  of 
the  problems  presented. 

In  order  to  insure  continuous  action  and  to  avoid  delays  it  recom- 
mends the  appointment  by  the  chairman  of  the  Pan  American  Finan- 
cial Conference  of  a  permanent  committee,  to  be  composed  of  repre- 
sentatives from  the  United  States  and  from  Argentina,  Brazil, 
Uruguay,  Chile,  Ecuador,  and  Peru.  It  should  be  the  duty  of  this 
committee  to  obtain  and  furnish  information  pertinent  to  the  subject 
and  to  take  such  other  steps  as  in  its  discretion  may  seem  fit  or 
necessary  to  put  into  effect  the  plans  outlined  in  the  reports  of  the 
subcommittees  above  alluded  to  and  further  to  consider  and  report 
to  the  chairman  of  the  Pan  American  Financial  Conference  any  other 
feasible,  effective  plan  for  the  establishment  of  the  desired  expansion 
of  shipping  facilities. 

In  conclusion,  it  is  the  unanimous  conviction  of  the  committee  that 
such  plans  should  be  adopted  as  will  most  speedily  establish  direct, 
effective,  and  permanent  transportation  facilities  between  the  United 
States  and  the  Republics  of  South  and  Central  America. 

Secretary  McAooo.  The  Honorable  David  K.  Francis  would  like  to 
say  a  few  words  on  this  subject. 

Gov.  DAVID  K.  FRANCIS  (St.  Louis) : 

Mr.  CHAIRMAN  AND  DELEGATES  OF  THE  PAN  AMERICAN  FINANCIAL 
CONFERENCE.  On  behalf  of  the  Transportation  and  Communication 
Committee,  of  which  I  was  acting  chairman  in  the  absence  of  Mr. 
Hale  Pearson,  I  desire  to  call  your  attention  to  two  features  *of  that 
report  and  to  its  conclusion. 

You  will  observe  that  the  committee  at  its  first  session  assigned  to 
the  foreign  members  the  subject  of  ocean  transportation.  There 
were  representatives  on  the  committee  from  six  South  American 
countries  only,  the  countries  of  Central  America  stating  they  had 
transportation  facilities  which,  for  the  present,  are  adequate.  You 
learned  from  the  report  that  the  delegates  from  South  America  were 
divided  as  to  what  policy  should  be  adopted  toward  the  establish- 
ment of  ocean  communication.  Those  of  the  Atlantic  coast  pro- 
posed that  bids  be  received  until  the  31st  of  December  from  parties 
desiring  to  operate  steamers  between  Montevideo,  Buenos  Aires,  Rio, 
and  New  York;  in  other  words,  that  plan  was  virtually  a  subsidy 
plan,  whereas  the  countries  of  the  Pacific  coast  recommended  that 


282  PAN  AMERICAN   FINANCIAL  CONFERENCE. 

this  communication  be  established  by  the  purchase  and  operation  of 
vessels  by  the  countries  themselves  and  by  private  enterprise,  stating 
in  no  indefinite  terms  that  the  conditions  on  the  east  coast  differed 
from  those  on  the  west  coast.  But  in  the  conclusion  there  was  no 
real  difference  of  opinion  among  any  of  the  committee. 

This,  gentlemen,  in  my  opinion,  is  about  the  most  remarkable  Con- 
ference I  have  ever  attended.  For  more  than  thirty  years  I  have  been 
attending  conventions  and  congresses  and  national  gatherings  in  the 
United  States,  and  I  have  never  seen  one  which  was  composed  of  men 
more  representative  not  only  in  their  foreign  countries  but  in  this 
country  as  well.  Nor  have  I  participated  in  the  deliberation  of 
any  assemblage  where  the  members,  devoted  themselves  more  assid- 
uously, more  intelligently,  and  more  effectively  to  the  business  of 
the  meeting  than  has  been  the  case  in  this  Conference,  which  has  been 
in  session  for  a  week.  Men  of  affairs  from  the  United  States  have 
come  here  and  for  an  entire  week  have  given  their  best  thought  and 
all  of  their  time  to  the  objects  of  the  Conference. 

What  a  contrast  is  there  between  conditions  prevailing  on  the 
Western  Hemisphere  and  those  prevailing  on  the  Eastern  Hemi- 
sphere !  You  need  only  to  have  your  attention  called  to  the  state  of 
affairs  here  to  arouse  within  your  breast  a  sentiment  of  admiration. 
Here  all  of  the  countries  .of  Central  and  South  America  are  asking 
that  closer  relations  be  established  between  the  Republics  of  the  New 
World.  Their  delegates  are  here,  representative  men  in  their  respec- 
tive countries.  They  have  made  suggestions  which  I  am  sure  will  be 
prolific  of  much  good,  and  no  group  committee  report  has  neglected 
to  set  forth  the  necessity  for  better  transportation  facilities.  Are  we 
in  this  country  going  to  deny  to  our  brethren  from  Central  and  South 
America  what  they  are  asking  on  this  occasion  ?  If  not  our  duty,  it 
certainly  is  to  our  interest  to  make  a  very  prompt  and  effective 
response  to  such  expressions.  [Applause.] 

There  is  a  tide  in  the  affairs  of  nations,  as  well  as  in  the  affairs  of 
men,  which  should  be  taken  at  the  flood.  I  am  not  here  to  oppose 
subsidies,  nor  have  I  come  to  this  platform  to  advocate  government 
ownership,  but  I  am  here  to  raise  my  voice — and  in  so  doing  I  think 
that  I  reflect  the  sentiment  of  the  best  thought  and  the  higher  patriot- 
ism of  this  country — to  obtain  a  decided  and  emphatic  and  prompt 
expression  from  this  international  gathering  that  the  speediest  pos- 
sible plan  be  adopted  in  order  to  establish  quick,  direct,  regular,  and 
permanent  transportation  facilities  between  the  Eepublics  of  the 
Western  Hemisphere.  [Applause.] 

If  my  house  were  on  fire  I  should  not  ask  the  source  of  the  water 
used  to  extinguish  the  flames.  If  a  member  of  my  family  were  ill 
and  I  could  not  get  my  family  physician,  I  would  not  hesitate  to  call 
in  the  services  of  some  other  doctor.  It  strikes  me  that  almost  simi- 


PROCEEDINGS.  283 

lar  conditions  prevail  in  this  country  to-day.  We  have  an  oppor- 
tunity now  to  establish  closer  commercial  relations  with  the  Repub- 
lics of  Central  and  South  America,  and  it  is  our  duty  to  take  ad- 
vantage of  this  opportunity.  [Applause.]  It  may  not  return  to  us 
again  in  a  generation  or  a  century. 

I,  therefore,  Mr.  Chairman,  desire  to  offer  this  resolution,  which 
expresses  what  is  set  forth  in  the  conclusion  of  the  report  of  the  Com- 
mittee on  Transportation,  and  I  would  like  to  get  from  this  Confer- 
ence its  expression  upon  the  subject.  The  resolution  reads  as  fol- 
lows: 

THE  FRANCIS  RESOLUTION  ON  TRANSPORTATION. 

Resolved,  That  it  is  the  sense  of  this  Conference  that  improved  ocean  trans- 
portation facilities  between  the  countries  composing  the  Pan  American  Union 
has  become  a  vital  and  imperative  necessity  and  that  every  effort  should  be 
made  to  secure  at  the  earliest  possible  moment  such  improved  means  of  ocean 
transportation,  since  it  is  of  primary  importance  to  the  extension  of  trade  and 
commerce  and  improved  financial  relations  between  the  American  republics. 

[Applause.] 

Mr.  LE  GENDRE  (New  York).  I  presume  it  would  not  be  in  order 
to  offer  an  amendment? 

Secretary  McAixx).  What  is  it  that  you  desire? 

Mr.  LE  GENDRE.  I  was  going  to  suggest :  "  and  that  the  laws  of  the 
United  States  be  so  changed  that  this  may  be  brought  into  effect." 

Secretary  McAooo.  Let  me  say  that  I  appreciate  more  highly  than 
I  can  express  the  exhibition  of  confidence  which  this  committee  mani- 
fests in  the  chairman  of  this  meeting  when  it  proposes  that  he  ap- 
point an  international  committee  for  the  purpose  of  considering  this 
question.  I  do  not  believe,  however,  that  such  a  thing  is  practicable. 
I  should  be  very  happy  to  do  it  if  I  thought  it  would  produce  re- 
sults ;  but  I  think  it  is  manifestly  impossible  that  a  committee  of  that 
character,  designated  by  the  Secretary  of  the  Treasury  of  the  United 
States,  could  deal  with  this  problem;  for  it  seems  to  me  that  eacli 
country  has  got  to  handle  this  matter  in  its  own  way. 

Now,  as  I  said  before,  this  is  not  a  convention  for  the  purpose  of 
determining  national  policies.  It  is  a  Conference  for  the  purpose  of 
exchanging  views,  laying  upon  the  table  all  facts  and  information 
obtained,  together  with  expressions  of  opinion  from  the  various  coun- 
tries represented  here  as  to  what  things  are  needed,  with  suggested 
possible  remedies.  These  are  to  be  sifted  by  you,  and  we  are  going 
to  try  to  extract  from  this  crucible  into  which  we  put  all  of  these  sug- 
gestions, some  refined  thing  which  we  hope  will  work  to  the  advantage 
of  our  respective  countries. 

I  would,  therefore,  suggest  that  we  confine  our  expression  to  the 
resolution  which  Governor  Francis  has  offered.  I  do  not  think  that 
we  are  here  to  discuss  government  ownership  or  subsidies  or  any  other 


284  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

such  matter.  That  has  become  rather  a  political  controversy  in  this 
country,  and  this  is  not  the  place  to  thresh  it  out.  I  would  suggest, 
therefore,  that  the  Conference  proceed  to  express  itself  upon  Gov- 
ernor Francis's  resolution,  so  if  there  is  no  objection  I  shall  put  the 
question  on  that  resolution. 

Dr.  PEARSON  (Argentina).  I  take  great  pleasure  in  seconding  it. 

Secretary  McADOo.  I  do  not  think  we  shall  hurt  anybody's  feelings, 
whether  he  be  a  government  ownership  man  or  not. 

(The  Francis  resolution  was  unanimously  adopted.) 

Secretary  McADOO.  Now,  Mr.  Moore,  if  you  will  be  good  enough  to 
make  the  report  of  the  Committee  on  Uniformity  of  Laws  and  Inter- 
national Commercial  Court,  we  shall  be  glad  to  hear  it. 

UNIFORMITY  OF  LAWS  COMMITTEE  REPORT. 

Mr.  MOORE.  Mr.  Chairman  and  delegates,  in  strict  regularity  this 
report  should  be  presented  by  Governor  Hamlin,  of  the  Federal  Ee- 
serve  Board,  who  acted  as  chairman  of  the  committee  in  the  absence 
of  the  Secretary  of  Commerce ;  but,  Governor  Hamlin  being  uncertain 
as  to  when  his  public  duties  might  call  him  away,  he  requested  me 
to  undertake  his  task.  This  explains  why  I  am  standing  before  you 
again. 

In  our  report  we  have  endeavored  to  confine  ourselves  to  topics 
that  seemed  to  us  all  to  be  of  immediate  importance.  Many  pro- 
posals were  submitted  to  the  committee.  We  considered,  perhaps, 
from  forty  to  fifty  suggestions  or  topics  altogether ;  but  we  culled  out 
a  certain  number  in  regard  to  which  there  was  no  difference  of 
opinion  whatever  as  to  their  urgency. 

The  report  of  the  committee  consists  of  two  parts — first,  that  in 
which  the  subjects  to  be  dealt  with  are  enumerated,  and,  second, 
that  which  proposes  an  organization  for  the  purpose  of  carrying  out 
the  resolutions  of  the  Conference.  I  may  say  that  this  list  of  topics 
is  not  intended  to  be  final  and  exclusive.  If  it  should  be  desired 
hereafter  to  take  up  other  matters,  the  organization  presented  to 
the  Conference  will  be  able  to  consider  them  at  any  moment. 

The  report  is  comparatively  brief. 


I.    SUBJECTS. 


The  committee  has  not  taken  into  consideration  the  subject  of 
transportation,  which  should,  in  its  opinion,  be  kept  separate  and 
distinct  and  be  dealt  with  independently. 

The  subjects  which  should,  in  the  opinion  of  the  committee,  be 
dealt  with  in  the  report  of  the  committee  to  the  Conference  are : 

.    1.  The  establishment  of  a  gold  standard  of  value. 

2.  Bills  of  exchange,  commercial  paper,  and  bills  of  lading. 


PKOCEEDINGS.  285 

In  this  relation  we  have  drawn  attention  to  the  two  European 
conferences  that  have  been  held  on  this  subject.  Two  volumes 
printed  by  the  Government  of  the  United  States  may  be  obtained 
here,  containing  the  reports  of  those  conferences. 

3.  Uniform   (a)   classification  of  merchandise,   (6)  customs  regulations,   (c) 
consular  certificates  and  invoices,  (d)  port  charges. 

In  this  relation  we  have  ventured  to  call  attention  to  the  report 
adopted  by  the  Fourth  International  American  Conference,  at  Buenos 
Aires,  in  1910. 

4.  Uniform  regulations  for  commercial  travelers. 

Consider  in  this  relation  the  question  of  a  certificate  to  be  issued  by  the 
proper  department  of  the  government  of  the  country  from  which  the  traveler 
comes  that  the  bearer  is  a  bona  fide  commercial  traveler,  this  certificate  to  be 
properly  viseed. 

This  is,  I  believe,  generally  conceded  to  be  a  question  of  practical 
importance.  We  have  received  several  letters  from  merchants  advis- 
ing the  adoption  of  some  means  by  which  the  commercial  traveler, 
being  properly  certified,  may  have  free  course  with  his  samples.  This 
would  greatly  aid  in  the  promotion  of  trade. 

5.  To  what  extent  further  legislation  may  be  necessary  concerning  trade- 
marks, patents,  and  copyrights. 

Here  we  venture  to  call  attention  to  the  conventions  adopted  by 
the  Fourth  International  American  Conference. 

6.  The  establishment  of  a   uniform  low  rate  of  postage  and  of  changing 
money  orders  and  parcel  post  between  the  American  countries. 

7.  The  extension  of  the  process  of  arbitration  for  the  adjustment  of  commer- 
cial disputes.1 

II.    ORGANIZATION. 

I  come  now  to  organization,  and  the  committee  makes  the  follow- 
ing recommendations: 

1.  That  for  the  purpose  of  carrying  into  effect  the  resolutions  of  the  Confer- 
ence, and  particularly  for  bringing  about  uniformity  of  laws  on  the  subjects 
embraced  in  those  resolutions,  there  be  established  an  international  high  com- 
mission, to  be  composed  of  not  more  than  nine  members,  resident  in  each  coun- 
try, to  be  appointed  by  the  minister  of  finance  of  such  country.    The  aggregate 
members  thus  appointed  shall  constitute  the  commission. 

2.  That  for  the  purpose  of  aiding  the  international  high  commission  and 
coordinating  its  work  there  be  created  in  the  Pan  American  Union  a  bureau, 
whose  chief  shall  receive  a  salary  of  not  less  than  $5,000  gold  per  annum  ;  and 
it  is  recommended  that,  in  view  of  his  initiative  in  bringing  about  the  Con- 
ference, the  governing  board  of  the  Pan  American  Union  invite  the  Hon.  Wil- 
liam G.  McAdoo,  Secretary  of  the  Treasury  of  the  United  States,  to  suggest 
the  name  of  the  first  chief  of  this  bureau. 

[Applause.] 


clause,  not  originally  appearing  in  the  subcommittee's  report,  was,  at  the  last 
meeting  of  the  general  committee,  upon  motion  of  the  Hon.  John  Bassett  Moore,  unani- 
mously adopted  and  incorporated  into  the  complete  report. 


286  PAN  AMERICAN   FINANCIAL   CONFERENCE. 

Expenses  of  the  bureau,  including  the  salaries  of  the  chief  and  his  assist- 
ants, to  be  paid  by  the  Pan  American  Union,  in  whose  budget  a  corresponding 
provision  shall  be  included. 

3.  The  American  Governments  shall  instruct  their  diplomatic  and  consular 
officers  and  their  commercial  attaches  to  cooperate  with  the  international  high 
commission  and  with  the  bureau. 

The  bureau  shall  be  authorized  to  obtain  in  each  country  such  expert  assist- 
ance as  may  be  necessary  to  the  prosecution  of  its  work,  the  expenses  thus 
incurred  to  be  treaed  as  a  part  of  the  expenses  of  the  bureau. 

4.  The  bureau   shall   make  to   the   governing  board  of  the  Pan  American 
Union,  for  distribution  among  the  governments  concerned,  and  to  the  inter- 
national high  commission  an  annual  report. 

The  bureau  shall  make  to. the  next  International  American  Conference  a  full 
report  of  its  proceedings  up  to  that  time,  with  recommendations  as  to  future 
work. 

This  report  is  signed  by  all  of  the  members  of  the  general  com- 
mittee. When  the  Conference  shall  have  acted  upon  it,  I  will  ven- 
ture to  present  some  supplementary  resolutions,  the  design  of  which 
is  to  push  the  work  of  this  Conference  immediately  forward  without 
any  delay  whatever.  [Applause.] 

Secretary  McAooo.  Mr.  John  H.  Fahey,  president  of  the  United 
States  Chamber  of  Commerce,  will  now  say  a  few  words. 

GENERAL  RESOLUTIONS. 

Mr.  FAHEY  (Washington).  Mr.  Chairman  and  gentlemen  of  the 
Conference,  I  ask  the  privilege  of  recognition  on  the  part  of  the 
chair  to  present  certain  resolutions  on  behalf  of  the  members  of 
this  Conference  residents  of  the  United  States: 

Resolved,  That  we,  the  members  of  this  Conference  residents  of  the  United 
States,  desire  to  express  to  the  President  of  the  United  States  and  to  his  Cabi- 
net our  thanks  for  the  generous  hospitality  and  many  courtesies  which  have 
been  extended  to  us  in  connection  with  this  most  successful  meeting ; 

Resolved,  That  we  wish  particularly  to  record  our  appreciation  of  our  debt 
to  the  Secretary  of  the  Treasury,  whose  wise  statesmanship  inspired  this 
epoch-making  gathering,  not  only  for  his  efforts  in  bringing  us  together  but  for 
his  many  personal  courtesies  and  his  happy  direction  of  our  deliberations; 

[Applause.] 

Resolved,  That  to  the  Federal  Reserve  Board,  the  Assistant  Secretary  of 
the  Treasury,  the  Secretary-General  of  this  Conference,  the  Director  General  of 
the  Pan  American  Union,  the  press  of  the  Americas,  and  to  the  other  officials 
of  the  United  States  Government,  and  the  citizens  of  Washington  who  have 
so  thoughtfully  and  effectively  contributed  to  our  comfort  and  entertainment 
and  to  the  success  of  this  Conference,  we  would  also  express  our  earnest  thanks 
and  appreciation ; 

[Applause.] 

Resolved,  That  we  spread  on  the  records  of  this  meeting  formal  expression 
of  our  appreciation  of  the  high  character  and  constructive  ability  of  the  mem- 
bers of  this  Conference  from  our  sister  Republics  who  have  honored  us  by  this 


PROCEEDINGS.  287 

visit,  and  whose  heartiness,  energy,  and  efficiency  have  contributed  in  such 
large  measure  to  the  splendid  achievements  of  this  gathering.  The  memory  of 
this  event  and  the  opportunity  it  has  afforded  us  for  the  establishment  of  closer 
personal  relations  and  real  friendship  with  these  gentlemen  will  long  remain 
with  us,  and  we  pledge  ourselves  to  do  all  in  our  power  to  continue  to  promote 
this  helpful  intercourse. 

[Prolonged  applause.] 

Gentlemen,  since  in  their  modesty  it  may  embarrass  our  chair- 
man or  our  Secretary-General  to  present  this  motion,  I  beg  tu  take 
that  responsibility,  and  I  move  the  adoption  of  this  resolution. 

(The  motion  was  seconded  and  unanimously  carried.) 

And,  Mr.  Chairman,  I  should  like  also  to  take  the  opportunity  to 
say,  as  president  of  the  Chamber  of  Commerce  of  the  United  States, 
that  we  have  been  very  much  interested  in  the  several  suggestions 
presented  in  the  reports  that  are  before  this  Conference,  and  I  desire 
to  say  emphatically  that  the  Chamber  of  Commerce  of  the  United 
States  and  the  business  men  of  the  country  will  welcome  the  oppor- 
tunity to  cooperate  with  the  representatives  of  our  sister  Republics 
in  doing  all  possible  to  bring  into  practical  effect  the  suggestions 
that  have  been  made.  [Applause.] 

A  LATIN-AMERICAN  DELEGATE.  I  think,  Mr.  Chairman,  we  should 
not  be  selfish,  and  on  behalf  of  the  Latin- American  countries  I  arise 
to  thank  the  American  Government  and  the  American  authorities 
for  all  the  kindness  extended  to  us — and  not  only  the  gentlemen  of 
the  United  States  but  also  the  other  gentlemen  from  South  America — 
and  for  all  the  intelligent  work  they  have  done  during  this  week  with 
us.  [Applause.] 

Secretary  McADoo.  Those  who  favor  the  adoption  of  the  motion 
will  say  "  aye." 

(The  motion  was  unanimously  adopted.) 

ADOPTION  OF  UNIFORMITY  OF  LAWS  REPORT. 

Secretary  McAooo.  Gentlemen,  I  will  put  the  question  of  the 
adoption  of  the  report  of  the  Committee  on  Uniformity  of  Laws. 
Those  in  favor  of  the  adoption  of  that  report  will  say  "  aye  " ;  those 
against  it,  "no." 

(The  report  was  unanimously  adopted.) 

Mr.  MOORE.  I  now  have  the  honor  to  present  some  supplementary 
resolutions,  which  we  have  not  had  opportunity  to  have  printed. 

ADOPTION  OF  TRANSPORTATION  AND  COMMUNICATION  REPORT. 

Gov.  FRANCIS.  Beg  pardon,  Mr.  Chairman,  did  you  submit  to  the 
Conference  some  action  on  the  report  of  the  Committee  on  Trans- 
portation ? 


288  PAN   AMERICAN   FINANCIAL  CONFEEENCE. 

Secretary  McADoo.  The  report  itself  was  not  formally  adopted 
by  the  Conference,  because  it  has  some  conflicting  provisions  in  it, 
and  I  felt  it  ought  to  be  treated  like  the  group  committee  reports; 
that  is,  submitted  for  information  and  suggestion  for  future  action. 
But  your  resolution,  which  explains  the  attitude  of  this  Conference, 
was  adopted ;  and  that  seemed  to  me  to  be  the  wisest  disposition  of 
the  matter.  However,  if  you  desire  to  have  the  report  of  the  trans- 
portation committee  put  to  a  vote,  I  shall  be  very  happy  to  do  it. 

Gov.  FRANCIS.  I  do  not  wish  to  raise  any  controversy  in  regard 
to  that. 

Secretary  McAooo.  Those  in  favor  of  the  adoption  of  this  report 
will  say  "  aye  " ;  those  opposed,  "  no."  There  seems  to  be  one  vote 
against  it  and  two  for  it,  so  we  will  consider  it  adopted.  [Laughter.] 

Gov.  FRANCIS.  What  I  wished  to  call  to  your  attention  and  to  the 
attention  of  the  members  of  the  Conference,  is  that  you  declined  to 
follow  the  suggestion  of  that  committee,  which  was  to  appoint  a 
permanent  committee.  Now,  I  can  understand  very  well  your 
modesty  in  that  as  in  all  other  things,  but  I  think  this  Conference, 
before  adjourning,  should  adopt  some  method  whereby  the  recom- 
mendations of  that  report  can  be  put  into  practical  operation.  I 
do  not  know  whether  or  not  you  would  entertain  a  resolution  asking 
the  foreign  delegates  to  present  that  report  to  their  respective  gov- 
ernments, and  a  resolution  asking  you  to  present  it  to  the  Congress 
of  the  United  States.  If  so,  I  desire  to  offer  such  a  resolution. 

Secretary  McADoo.  Governor,  all  of  these  proceedings  will  take 
this  course.  The  foreign  delegates  will,  of  course,  present  these  re- 
ports to  their  respective  Governments.  The  Secretary  of  the  Treas- 
ury, will  make  a  full  report  of  the  proceedings  of  this  Conference  to 
Congress,  which  will  take  such  action  on  that  report  as  it  sees  fit.  I 
did  not  feel,  gentlemen,  that  the  Secretary  of  the  Treasury  of  the 
United  States  should  appoint  a  committee  from  foreign  countries  to 
deal  with  matters  in  their  own  States.  Therefore  I  ask  to  be  excused. 
The  whole  subject,  I  think,  will  be  covered  in  the  natural  course  of 
events  anyway.  Here  are  suggestions  which  each  one  of  the  govern- 
ments will  consider,  and  out  of  these  suggestions  we  hope  will  come 
some  happy  solution  of  the  problem. 

MISCELLANEOUS  MATTERS. 

Dr.  GONZALES  (Ecuador).  Mr.  Chairman  and  gentlemen,  our 
committee  has  suggested  something  which,  I  think,  is  very  interest- 
ing and  important,  namely,  the  issuance  of  a  Pan  American 
postage  stamp  to  commemorate  this  meeting,  to  be  used  in  all  of  the 
countries  during  a  certain  period.  I  wish  to  add  that  I  would  like  to 
see  the  picture  of  the  Secretary  of  the  Treasury  on  that  stamp.  [Pro- 
longed applause.]  I  fancy  that  everybody  in  America  will  know  you, 


PROCEEDINGS.  289 

because  I  believe  that  this  meeting  is  the  first  step  in  a  new  era  of 
Pan  American  international  trade,  and  I  feel  that  no  one  country 
will  refuse  to  vote  favorably  on  this  proposition. 

Secretary  McAooo.  Gentlemen,  I  am  exceedingly  flattered  by  this 
suggestion. 

Gov.  FRANCIS.  Mr.  Secretary,  put  the  motion  yourself. 

Secretary  McAixx).  Pardon  me  just  one  moment.  I  am  exceed- 
ingly flattered,  but  I  am  quite  sure  our  distinguished  friend  from 
Ecuador  will  appreciate  my  reluctance  to  accept  the  suggestion  to 
advocate  the  adoption  of  any  such  resolution  when  I  explain  one 
fact  to  him  that  is  well  known  in  the  United  States.  No  man's  pic- 
ture is  allowed  to  go  upon  a  postage  stamp  in  this  country  until  he 
has  been  dead  some  time.  [Applause  and  laughter.]  I  am  sure  that 
you  do  not  want  me  to  advocate  my  own  death;  and,  as  I  hope  I 
am  not  yet  considered  a  "  dead  one,"  and  that  I  may  not  be  a  "  dead 
one  "  for  a  good  many  years  to  come,  I  am  quite  sure  you  will  excuse 
me  from  putting  the  motion. 

Dr.  GONZALES.  If  that  is  not  possible,  Mr.  Secretary,  I  would  sug- 
gest the  map  of  the  Western  Hemisphere  might  be  put  on  the  stamp. 

Secretary  McADOO.  I  trust  you  will  excuse  me  for  treating  the 
matter  somewhat  facetiously.  I  feel  sure  you  will,  when  you  under- 
stand what  our  law  is. 

That  is  one  of  the  many  very  admirable  suggestions  submitted 
which,  in  turn,  will  be  considered  by  our  Government  and  by  your 
respective  Governments,  and  if  in  any  way  it  can  be  brought  about 
it  will  be  adopted. 

Dr.  GONZALES.  I  wish,  anyway,  to  leave  a  record  of  that. 

Secretary  McADOO.  I  thank  you,  sir. 

MOORE    RESOLUTIONS    REGARDING    INTERNATIONAL    HIGH 

COMMISSION. 

Mr.  MOORE  (continuing).  I  beg  leave  to  present  the  following 
resolutions  which,  as  I  stated,  we  have  not  had  an  opportunity  to 
have  printed: 

Resolved,  That  it  is  the  sense  of  this  Conference — 

1.  That  the  local  members  of  the  international  high  commission  should  be 
immediately  appointed  by  their  respective  ministers  of  finance. 

2.  That  the  members  of  the  international  high  commission  appointed  in  each 
'country  should  immediately  begin  preparatory  work,  and  that  the  yarious  Gov- 
ernments be  requested,  through  their  appropriate  departments,  to  cooperate 
in  the  work  of  the  commission. 

3.  That   pending   the   establishment  of   the   bureau   in   the   Pan   American 
Union,  as  recommended  in  the  report  of  the  committee  on  uniformity  of  laws, 
the  president  of  this  Conference  be  requested  immediately  to  appoint  a  gen- 

98257°— 15 19 


290  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

eral  secretary  to  the  international  high  commission  to  perform  such  duties 
as  are  necessary  in  the  preparatory  work  of  the  commission. 

4.  That  the  United  States  members  of  the  international  high  commission 
should  as  soon  as  practicable  proceed  to  visit  the  other  American  countries  to 
meet  the  members  of  the  commission  there  resident. 

Secretary  McADOO.   Gentlemen,  you  have  heard  the  resolutions. 
Those  in  favor  say  "Aye";  those  opposed,  "No." 
(The  motion  was  unanimously  adopted.) 

MISCELLANEOUS  BUSINESS. 

Secretary  McAooo.  As  we  are  now  approaching  the  end  of  the 
Conference,  I  wish  to  say  that  if  there  are  any  other  resolutions 
which  any  gentleman  desires  to  offer  it  may  be  done  now. 

Mr.  ROGER  W.  BABSON  (Boston).  May  I  ask, Mr.  Chairman,  if  you 
wrould  consider  a  motion  to  have  the  Secretary  of  the  Treasury 
appoint  a  committee  from  this  country  on  a  shipping  bill,  to  start  it 
along  the  same  lines  that  Mr.  Moore  suggested  starting  the  plan  for 
the  uniformity  of  laws? 

Secretary  McADoo.  I  think  it  would  be  unwise  to  do  that.  It 
seems  just  a  bit  outside  of  the  scope  of  this  Conference.  The  ship- 
ping question  here  has  become  very  much  of  a  political  question, 
and  I  am  most  anxious  that  politics  shall  not  be  injected  into  this 
meeting  in  any  form  at  all.  [Applause.] 

Are  there  resolutions  of  any  kind  or  motions  anyone  wishes  to 
make?  Does  any  gentleman  desire  to  say  anything  before  we  take 
up  the  last  phase  of  the  Conference?  If  not,  then  permit  me  to  say 
a  few  words  in  conclusion. 

CONCLUDING  REMARKS  OF  SECRETARY  OF  THE  TREASURY. 

First  of  all,  I  wish  to  return  my  most  sincere  and  heartfelt  thanks 
for  the  resolutions  you  have  passed  to-day  in  which  you  are  good 
enough  and  generous  enough  to  make  complimentary  allusions  to 
your  presiding  officer,  and  to  say  that  I  feel  deeply  touched  not  only 
by  those  resolutions,  but  also  by  the  exceeding  great  courtesy,  kind- 
ness, and  consideration  which  you  have  shown  to  me  throughout  this 
notable  gathering. 

In  conducting  this  Conference  I  have  felt  that  it  was  not  my  part 
to  seek  in  any  way  to  impress  my  views  upon  this  gathering;  that,  on 
the  other  hand,  I  should  simply  use  whatever  power  I  possess  to 
encourage  as  free  an  expression  of  views  on  your  part  as  you  might 
care  to  give.  It  has  been  my  earnest  desire  that  each  one  of  you 
should  leave  here  with  the  feeling  that  there  has  been  no  attempt  on 
the  part  of  your  chairman  to  interfere  in  the  slightest  degree  with 


PROCEEDINGS.  291 

the  free  and  untrammeled  expression  of  your  views  and  opinions, 
and  I  hope,  gentlemen,  that  you  will  at  least  credit  me  with  having 
conducted  the  Conference  along  these  lines  with  strict  impartiality. 
[Applause.]  If  I  have  failed  in  doing  so,  it  is  because  my  poor 
powers  have  not  enabled  me  to  do  better. 

We  do  not  want  all  the  effort  and  work  of  this  Conference  to  "  go 
up  in  smoke."  I  did  not  expect  when  this  Conference  was  conceived 
that  we  should  get  the  fruit  of  it  by  the  time  it  adjourned.  On  the 
contrary,  we  know  as  a  fact,  in  nature  as  well  as  in  the  affairs  of  life, 
that  in  order  to  secure  the  fruit,  seed  have  to  be  planted,  and  after 
the  seed  have  been  planted  they  must  be  cultivated  in  a  practical, 
efficient,  and  intelligent  manner.  What  I  hoped  we  could  accomplish 
was  to  plant  some  genuine  seed — seed  that  have  within  them  the 
elements  of  life,  seed  that  are  vital  with  potentialities — so  that  by 
intelligent  cultivation  along  practical  lines  we  would  in  due  season 
reap  the  fruit  of  our  efforts ;  and  I  do  not  mean  fruit  of  a  material 
sort  only,  although,  as  I  said  in  my  opening  remarks,  a  wholesome 
materialism  is  essential  to  the  prosperity  and  happiness  of  the  people 
of  every  nation,  but  I  mean  fruit,  also,  of  that  finer  and  nobler 
quality  which  represents  the  cardinal  principles  of  truth  and  moral- 
ity— fruit  which  we  may  eat  with  the  knowledge  and  in  the  confi- 
dence that  it  is  going  to  make  us  stronger  in  unity  of  purpose  and 
community  of  ideals  and  more  powerful  for  the  promotion  of  the 
peace  of  mankind.  Let  us  hope  that,  we  have  laid  here  the  secure 
foundations  for  enduring  peace — in  the  northern  and  southern  conti- 
nents of  this  hemisphere,  at  least  [applause] — and  that,  having 
accomplished  that,  we  may  set  an  exaniple  to  the  world  of  high 
political,  material,  and  industrial  morality  through  which  there  may 
be  brought  in  time  to  our  unfortunate  neighbors  of  the  Eastern 
Hemisphere  the  beatitude  of  restored  and  perpetual  peace  and  pros- 
perity. [Applause.] 

I  believe,  gentlemen,  that  you  have  through  your  group  reports 
planted  some  very  vital  seed  and  that  you  will  certainly  reap  a 
harvest  if  we  get  the  right  sort  of  cultivators.  We  have  got  to  see 
to  it  that  after  we  adjourn  to-day  this  wrork  is  going  to  be  kept  up. 
I  am  very  happy  that  the  Committee  on  Uniform  Laws  has  adopted 
the  suggestion  made  in  my  speech  at  the  opening  of  this  Conference 
for  the  appointment  of  a  joint  high  commission  to  cooperate  with  the 
Pan  American  Union  for  the  purpose  of  bringing  about  the  great 
reforms  outlined  in  their  report. 

The  committee  has  suggested  an  admirable  way  of  securing  quickly 
the  appointment  of  this  international  high  commission,  namely,  that 
the  finance  minister  of  each  country  appoint  a  commission  of  nine 
men  to  continue  the  work  so  auspiciously  begun  here.  The  Secretary 


292  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

of  the  Treasury  in  the  United  States  corresponds  to  the  finance  min- 
ister in  other  countries,  and  I  assume,  Mr.  Chairman  [addressing  Mr. 
John  Bassett  Moore] ,  that  you  mean  to  include  him  in  your  descrip- 
tion of  finance  minister  and  expect  him  to  act  for  the  United  States. 
[Mr.  Moore  replied,  "  Yes."] 

I  shall  be  very  happy  to  appoint  such  a  commission  in  this  country. 
Of  course,  it  will  have  no  official  status,  but  it  will  have  character  and 
standing  as  a  committee  acting  under  the  authority  of  this  Conference, 
and  I  hope  that  the  finance  minister  of  each  of  the  countries  repre- 
sented here  will  take  similar  action  and  appoint  similar  commissions. 
When  this  has  been  done  a  joint  high  commission  will  be  constituted 
by  voluntary  action  and  may  present  the  report  of  this  Conference 
to  their  respective  countries  and  seek  such  governmental  aid  and 
action  as  may  be  necessary  to  carry  out  the  objects  in  view. 

Much  of  the  success  of  this  Conference  has  resulted  from  the  group 
conferences  through  which  the  delegates  from  each  of  the  Latin 
American  countries  have  been  brought  into  close  contact  with  a  com- 
mittee of  representative  financiers  and  business  men  of  the  United 
States,  with  a  resulting  interchange  of  views  at  close  range  and 
under  conditions  where  the  problems  of  each  country  could  be 
thrashed  out  and  the  difficulties  and  impediments  in  the  way  of  more 
extended  trade,  commerce,  and  intercourse  between  them  developed. 
The  group  committees  in  this  country  should  be  made  permanent, 
and  if  I  may  be  permitted  to  say  so,  the  delegates  of  each  of  the 
countries  represented  here  should  be  continued  as  group  committees 
in  their  respective  countries,  for  the  time  being,  so  that  they  may  keep 
in  touch  with  each  other  and  continue  the  good  work  we  have  started 
here. 

I  am  going  to  take  the  liberty,  therefore,  of  appointing  in  this 
country  group  committees  of  able  and  reputable  men  of  the  United 
States  to  replace  the  group  committees  which  were  appointed  to 
serve  during  the  sessions  of  this  Conference.  These  will  have  to  be 
selected  with  great  care.  I  wish  I  could  continue  the  group  com- 
mittees already  organized,  but  since  there  are  officials  of  this  Gov- 
ernment on  these  committees,  you  can  readily  understand  that  the 
conditions  under  which  these  committees  must  act  in  the  future  make 
it  impracticable,  if  not  inadvisable,  to  have  representatives  of  this 
Government  on  them.  Eighteen  new  group  committees  in  this  coun- 
try will  be  selected  as  quickly  as  possible,  and  one  will  be  assigned 
to  each  of  the  countries  represented  in  this  conference.  While  these 
committees  will  have  no  official  status,  they  will  have  a  recognized 
standing  in  this  country  and  in  your  countries,  I  hope,  so  that  when 
you  have  matters  upon  which  you  wish  to  secure  information,  or 
which  you  may  wish  to  submit  for  the  consideration  of  financiers, 


PROCEEDINGS.  293 

merchants,  or  manufacturers  in  the  United  States,  you  will  have  a 
committee  in  the  United  States  through  which  you  may  get  such 
information  or  get  into  contact  with  our  people.  As  before  stated, 
I  would  suggest  that  the  delegates  of  your  respective  countries  con- 
tinue to  act  as  group  committees,  or  that  similar  committees  be 
appointed  in  your  countries,  so  that  our  people  may  have  a  recog- 
nized channel  through  which  reliable  information  may  be  obtained. 

The  committees  for  the  United  States  will  be  announced  later.  I 
shall  try  to  form  them  in  such  a  way  that  they  will  be  live  committees 
and  continue  to  do  effective  work.  [Applause.] 

Before  you  leave  this  country  for  your  homes  I  hope  to  be  able  to 
announce  these  committees,  so  that  you  may  know  just  what  the 
organization  here  is  to  be.  In  this  connection  I  desire  to  say  that  I 
shall  take  the  greatest  pleasure  in  suggesting  to  the  President  that  in 
his  next  message  to  the  Congress  he  refer  to  the  work  of  this  Pan 
American  Financial  Conference,  and  make  appropriate  recommenda- 
tions for  carrying  on  the  work  so  auspiciously  begun  here,  and  that 
sufficient  appropriations  be  made  for  the  purpose.  If  we  can  get 
that  done,  we  can  give  a  great  impulse  to  the  work  in  this  country 
[applause],  and  I  sincerely  hope  that  you  on  your  part  will  make 
similar  recommendations  to  your  Governments  and  induce  them  to 
take  similar  action. 

By  this  means  and  by  coordinating  the  work  of  these  various  com- 
mittees and  proceeding  along  common  lines  of  mutual  interest  and 
in  cooperation  with  the  Pan  American  Union — and  I  know  my  dis- 
tinguished friend,  John  Barrett,  will  gladly  pull  with  us — I  am  quite 
sure  that  we  can  put  enough  ginger  into  this  movement  to  get  practi- 
cal results,  and  that  is  what  we  want.  We  do  not  want  our  work  to 
expire  with  this  Conference.  We  want  every  man  here  to  put  all 
the  force  into  it  that  he  individually  possesses  and  all  the  influence 
and  enthusiasm  that  he  commands  in  order  to  realize  the  great  results 
we  are  trying  to  achieve. 

Now,  gentlemen,  I  want,  in  conclusion,  to  assure  you  again  of  my 
most  cordial  appreciation  of  your  coming  here,  and  to  you  gentlemen 
of  Latin  America  do  I  feel  most  deeply  indebted  for  all  the  time, 
patience,  and  toil  that  you  have  given  to  the  work  in  hand.  We  are 
most  grateful  to  you  for  coming  such  a  long  distance  to  join  us  in 
these  deliberations. 

I  hope  that  you  will  have  a  delightful  trip  through  our  country. 
We  have  tried  to  arrange  a  journey  that  will  give  you  a  small  under- 
standing, at  least,  of  the  greatness  of  our  resources,  our  industries, 
and  our  economic  development.  In  the  first  part  of  the  trip  I  am 
sorry  to  say  that  I  shall  not  be  able  to  accompany  you,  but  I  am 
trying  to  arrange  my  plans  to  join  you,  if  possible,  in  Chicago  and 


294  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

make  the  remainder  of  the  journey  with  you.     I  hope  I  may  succeed 
in  doing  that.     [Prolonged  applause.] 

I  am  going  to  ask  Secretary  Bryan  if  he  will  not  say  a  few  words 
to  you  in  conclusion. 

REMARKS  BY  THE  SECRETARY  OF  STATE. 

Secretary  BRYAN.  Mr.  Secretary  and  gentlemen  of  the  Conference, 
it  has  during  the  past  two  years  given  me  great  pleasure  to  support 
the  Secretary  of  the  Treasury  in  the  very  important  work  which  he 
has  done  in  connection  with  domestic  problems,  and  in  this  interna- 
tional work  which  he  has  conceived  and  brought  to  such  a  successful 
consummation  he  has  also  had  my  most  earnest  and  sympathetic  coop- 
eration. I  am  sure  that  no  one  who  has  had  to  do  with  this  meeting 
has  found  more  satisfaction  than  I  have  in  the  very  obvious  results 
that  have  thus  far  been  accomplished.  It  was  not  to  be  expected 
that  you  would  be  able  to  complete  all  the  work  that  has  been  under- 
taken. In  fact,  as  I  have  thought  of  this  meeting  I  have  been  re- 
minded of  the  school  events  that  are  associated  with  this  period  of 
the  year.  This  is  our  "  commencement "  season,  the  commencement 
being  the  conclusion  of  the  course  of  study.  The  word  commence- 
ment has  been  chosen  to  describe  these  exercises  because  it  is  under- 
stood that  the  training  prepares  the  student  for  the  work  which  lies 
before  him — the  work  which  he  is  about  to  begin.  I  shall  remember 
this  meeting  as  a  commencement  exercise,  not  as  the  conclusion  of 
our  work. 

You  have  been  brought  together  here  and  have  become  acquainted, 
and  this  acquaintance  will,  I  doubt  not,  in  many  cases  ripen  into  a 
friendship  that  will  not  only  give  pleasure  to  those  in  attendance, 
but  will  have  a  substantial  and  material  basis  also  in  the  good  Avhich 
our  respective  countries  will  derive  from  it. 

I  congratulate  you  upon  having  laid  the  foundation:  I  am  sure 
the  superstructure  will  be  all  that  you  can  hope  for.  Yon  have 
learned  a  very  important  lesson  at  this  Conference,  namely,  that 
there  is  a  sympathetic  relationship  binding  the  United  States  to  all 
of  the  sister  Republics  and  binding  each  of  them  to  every  other  one. 
Upon  this  sympathetic  relationship  we  shall  construct  the  enduring 
edifice  of  Pan  American  solidarity,  which  means  so  much  to  all  of 
our  nations.  [Applause.] 

You  have,  it  is  true,  gone  to  considerable  expense  and  given  con- 
siderable time  to  this  meeting,  but  nothing  that  is  of  value  can  be 
accomplished  without  effort.  As  we  look  back  over  our  lives  our 
memories  dwell  with  most  satisfaction  upon  those  occasions  which 
have  drawn  out  that  which  is  best  in  us;  if  this  be  true,  then  I  am 


PROCEEDINGS.  295 

sure  that  this  week  will  be  a  bright  one  in  the  memory  of  all  who  have 
participated,  for  this  gathering  will  result  in  a  larger  acquaintance, 
a  closer  intimacy,  and  a  mutual  helpfulness  that  will  add  greatly  to 
the  happiness  of  all.  I  thank  you.  [Prolonged  applause.] 

Secretary  McADoo.  Gentlemen,  the  formal  work  of  the  Conference 
now  being  concluded  and  the  commencement  begun,  I  will  declare 
the  conclusion  finished !  [Laughter.]  I  now  declare  the  Pan  Ameri- 
can Financial  Conference  adjourned.  We  shall  meet  you  all  this 
evening  at  8  o'clock  at  dinner  I  hope.  [Applause.] 

(With  this  the  seventh  and  closing  session,  the  Conference  was 
adjourned.) 


REPORTS  OF  GENERAL 
COMMITTEES 


297 


REPORT  OF  THE  GENERAL  COMMITTEE  ON 
UNIFORMITY  OF  LAWS  RELATING  TO  TRADE, 
.    COMMERCE,  AND  INTERNATIONAL 
COMMERCIAL  COURT 


299 


REPORT  OF  THE  GENERAL  COMMITTEE  ON  UNIFORMITY  OF 
LAWS  RELATING  TO  TRADE,  COMMERCE,  AND  INTERNA- 
TIONAL COMMERCIAL  COURT,  APPOINTED  TO  CONSIDER  AND 
REPORT  UPON  (1)  THE  SUBJECTS  TO  BE  DEALT  WITH  BY  THE 
GENERAL  COMMITTEE,  AND  (2)  THE  ORGANIZATION  NECES- 
SARY TO  CARRY  INTO  EFFECT  THE  RESOLUTIONS  OF  THE 
CONFERENCE. 


I.  SUBJECTS. 

Hon.  WILLIAM  G.  McAooo,  Secretary  of  the  Treasury, 

Chairman  Pan  American  Financial  Conference. 

SIR:  The  committee  has  not  taken  into  consideration  the  subject  of 
transportation,  which  should,  in  its  opinion,  be  kept  separate  and 
distinct  and  be  dealt  with  independently. 

The  subjects  which  should,  in  the  opinion  of  the  committee,  be 
dealt  with  in  the  report  of  the  committee  to  the  conference  are : 

1.  The  establishment  of  a  gold  standard  of  value. 

2.  Bills  of  exchange,  commercial  paper,  and  bills  of  lading. 
(Note  the  results  of  the  two  European  conferences  on  these  sub- 
jects.) 

3.  Uniform  (a)  classification  of  merchandise,   (b)  customs  regu- 
lations, (c)  consular  certificates  and  invoices,  (d)  port  charges. 

(See  the  report  adopted  by  the  Fourth  International  American 
Conference,  at  Buenos  Aires,  1910.) 

4.  Uniform  regulations  for  commercial  travelers. 

Consider  in  this  relation  the  question  of  a  certificate  to  be  issued 
by  the  proper  department  of  the  Government  of  the  country  from 
which  the  traveler  comes  that  the  bearer  is  a  bona  fide  commercial 
traveler,  this  certificate  to  be  properly  viseed.  , 

5.  To  what  extent  further  legislation  may  be  necessary  concerning 
trade-marks,  patents,  and  copyrights.   (See  the  treaties  adopted  by 
the  Fourth  International  American  Conference.) 

6.  The  establishment  of  a  uniform  low  rate  of  postage  and  of 
charges  for  money  orders  and  parcels  post  between  the  American 
countries. 

7.  The  extension  of  the  procedure  of  arbitration  for  the  adjustment 
of  commercial  disputes.* 

II.  ORGANIZATION. 

1.  That  for  the  purpose  of  carrying  into  effect  the  resolutions  of 
the  conference,  and  particularly  for  bringing  about  uniformity  of 
laws  on  the  subjects  embraced  in  those  resolutions,  there  be  estab- 
lished an  international  high  commission,  to  be  composed  of  not  more 
than  nine  members,  resident  in  each  country,  to  be  appointed  by  the 

*  This  clause  was  drawn  up  later  by  Mr.  Moore  and  unanimously  adopted. 

301 


302  PAN   AMERICAN    FINANCIAL   CONFERENCE. 

minister  of  finance  of  such  country.  The  aggregate  members  thus 
appointed  shall  constitute  the  commission. 

2.  That  for  the  purpose  of  aiding  the  International  High  Commis- 
sion and  coordinating  its  work  there  be  created  in  the  Pan  American 
Union  a  bureau,  whose  chief  shall  receive  a  salary  of  not  less  than 
$5,000  (gold)  per  annum;  and  it  is  recommended  that,  in  view  of  his 
initiative  in  bringing  about  the  conference,  the  governing  board  of 
the  Pan  American  Union  invite  the  Hon.  William  G.  McAdoo,  Sec- 
retary of  the  Treasury  of  the  United  States,  to  suggest  the  name  of 
the  first  chief  of  this  bureau.  Expenses  of  the  bureau,  including  the 
salaries  of  the  chief  and  his  assistants,  to  be  paid  by  the  Pan  Ameri- 
can Union,  in*  whose  budget  a  corresponding  increase  shall  be 
included. 

•  3.  The  American  Governments  are  requsted  to  instruct  their  diplo- 
matic and  consular  officers  and  their  commercial  attaches  to  cooperate 
with  the  International  High  Commission  and  with  the  bureau. 

The  bureau  shall  be  authorized  to  obtain  in  each  country  such 
expert  assistance  as  may  be  necessary  to  the  prosecution  of  its  work, 
the  expenses  thus  incurred  to  be  treated  as  a  part  of  the  expenses  of 
the  bureau. 

4.  The  bureau  shall  make  to  the  governing  board  of  the  Pan 
American  Union,  for  distribution  among  the  Governments  con- 
cerned, and  to  the  International  High  Commission,  an  annual  report. 

The  bureau  shall  make  to  the  next  International  American  Con- 
ference a  full  report  of  its  proceedings  up  to  that  time,  with  recom- 
mendations as  to  future  work. 

(Signed)  WILLIAM  C.  REDFIELD,  Chairman. 

SAMUEL  HALE  PEARSON. 
IGNACIO  CALDERON. 
AMARO  CAVALCANTI. 
Luis  IZQUIERDO. 
SANTIAGO  PEREZ  TRIANA. 
ROBERTO  ANCIZAR. 
JOHN  M.  KEITH. 
PABLO  DESVERNINE  Y  GALDOS. 
FRANCISCO  J.  PEYNADO. 
VICENTE  GONZALES  B. 
JUAN  S.  LARA. 
LEOPOLDO  CORDOVA. 
PEDRO  RAFAEL  CUADRA. 
RAMON  F.  ACEVEDO. 
WILLIAM  WALLACE  WHITE. 
ISAAC  ALZAMORA. 
ALFONSO  QUINONEZ  M. 
CARLOS  MARIA  DE  PENA. 
PEDRO  RAFAEL  RIN CONES. 


REPORTS   OF   GENERAL   COMMITTEES.  303 

(Members  representing  the  United  States:) 

CHARLES  S.  HAMLJN. 
JOHN  BARRETT. 
CHARLES  A.  CONANT. 
DAVID  E.  FRANCIS. 
JOHN  HAYS  HAMMOND. 
JOHN  BASSETT  MOORE, 
GEORGE  N.  NUMSEN. 
W.  L.  SATJNDERS. 
WILLARD  STRAIGHT. 
BENJAMIN  STRONG,  Jr. 
SAMUEL  UNTERMYER. 

ROBERT  W.  WOOLEY. 
CLAUD  DE  BAUN, 

Committee  Secretary. 

SUPPLEMENTARY  RESOLUTIONS  OFFERED  BY  THE  HON.  JOHN 

BASSETT  MOORE. 

After  the  report  of  the  Committee  on  Uniformity  of  Laws  had  been 
read  and  unanimously  adopted,  the  Hon.  John  Bassett  Moore  pre- 
sented the  following  additional  resolutions,  which  were  unanimously 
adopted  at  the  afternoon  session  of  Saturday,  May  29,  1915 : 

Resolved,  That  it  is  the  sense  of  this  Conference — 

1.  That  the  local  members  of  the  International  High  Commission  should  be 
immediately  appointed  by  their  respective  Ministers  of  Finance. 

2.  That  the  members  of  the  International  High   Commission   appointed  in 
each  country  should  immediately  begin  preparatory  work,  and  that  the  various 
Governments  be  requested,  through  their  appropriate  departments,  to  cooperate 
in  the  work  of  the  commission. 

3.  That  pending  the  establishment  of  the  bureau  in  the  Pan  American  Union, 
as  recommended  in  the  report  of  the  Committee  on  Uniform  Laws,  the  president 
of  this  Conference  be  requested  immediately  to  appoint  a  general  secretary 
to  the  International  High  Commission  to  perform  such  duties  as  are  necessary 
in  the  preparatory  work  of  the  commission. 

4.  That  the  United  States  members  of  the  International  High  Commission 
should,  as  soon  as  practicable,  proceed  to  visit  the  other  American  countries 
to  meet  the  members  of  the  commission  there  resident. 


REPORT  OF  THE  GENERAL  COMMITTEE  ON  TRANS- 
PORTATION AND  COMMUNICATION 


08257  °—1 5 20  305 


REPORT  OF  THE  GENERAL  COMMITTEE  ON  TRANSPORTATION 
AND  COMMUNICATION,  SUBMITTED  TO  THE  PAN  AMERICAN 
FINANCIAL  CONFERENCE  AT  THE  SESSION  OF  SATURDAY 
AFTERNOON,  MAY  29. 

Hon.  WILLIAM  G.  McAooo,  Secretary  of  the  Treasury, 

Chairman  Pan  American  Financial  Conference. 

SIR:  Your  committee  on  transportation  and  communication  re- 
solved that  a  subcommittee,  to  be  composed  of  one  member  from  each 
of  the  South  American  countries  represented  on  the  general  com- 
mittee, confer  and  report  back  any  plan  or  plans  for  the  inaugura- 
tion of  more  regular,  rapid,  frequent,  and  up-to-date  communication 
between  these  countries  and  the  United  States  which  seemed  to  them 
practical  of  accomplishment. 

This  subcommittee,  composed  of  Messrs.  Aldao,  Cavalcanti,  Gon- 
zales,  Alzamora,  Cosio,  and  Vergara,  submitted  two  reports,  one 
signed  by  Messrs.  Aldao,  of  Argentina;  Cavalcanti,  of  Brazil;  and 
Cosio,  of  Uruguay ;  and  the  other  by  Mr.  Vergara,  of  Chile. 

These  two  reports  are  designated  respectively  as  "A"  and  "  B." 

Eeport  "A,"  submitted  to  the  general  committee  on  transportation 
and  communication  by  Messrs.  Aldao,  Cavalcanti,  and  Cosio : 

The  Pan  American  Financial  Conference  begs  to  suggest  the  advisability  of 
calling  for  bids  not  later  than  December  31,  1915,  for  the  establishment  of  a 
regular  line  of  fast  mail  steamers  between  United  States  ports  and  Rio  de 
Janeiro,  Montevideo;  and  Puenos  Aires,  under  the  following  conditions: 

Steamers  to  have  at  least  10,000  tons  displacement ;  to  make  at  least  two  trips 
per  month,  with  accommodations  for  at  least  150  first-class  cabin  passengers; 
with  refrigerating  arrangements;  and  to  complete  the  trip  between  United 
States  ports  decided  upon  and  Buenos  Aires,  pier  to  pier,  in  not  more  than  15 
days. 

Bidders  to  state  the  compensation  demanded,  and  the  period  of  the  contract. 

As  part  of  the  compensation  for  services  rendered,  said  vessels  to  be  exempt 
for  five  years  from  all  fiscal  charges  in  the  respective  countries  and  to  enjoy 
all  facilities  granted  to  any  other  vessels. 

Bids  to  be  acted  upon  within  three  months  and  preference  to  be  given,  all 
other  conditions  being  similar,  to  whoever  will  provide  for  earlier  inauguration 
of  the  service. 

The  Governments  of  the  respective  countries  to  agree  upon  the  proportionate 
charges  to  be  paid  by  each  and  upon  all  other  details. 

(Signed)  ALDAO. 

CAVALCANTI. 
Cosio. 

Report  "  B,"  submitted  to  the  general  committee  on  transportation 
and  communication  by  Mr.  Yergara,  of  Chile : 

In  the  conference  of  to-day  of  the  subcommittee,  the  Minister  of  Finance  of 
Uruguay,  Dr.  Cosio ;  the  delegate  of  Argentina,  Dr.  Aldao ;  and  the  undersigned 
delegate  of  Chile  formulated  three  separate  projects  for  the  establishment  of 
fast  maritime  transportation  between  the  interested  countries. 

307 


308  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

In  view  of  this  fact  and  of  the  circumstance  that  the  delegates  of  Colombia, 
Venezuela,  Panama,  and  the  Republics  of  Central  America  had  expressed  in  the 
general  meeting  of  the  conference  that  their  respective  countries  for  the  present 
have  no  interest  in  the  proposed  question  it  was  agreed : 

(a)  That  there  should  be  only  two  lines  of  fast  steamers;  one  to  serve  the 
ports  of  Brazil,  Uruguay,  and  the  Argentine  Republic,  and  the  other  to  serve 
Ecuador,  Peru,  and  Chile. 

(&)  That  the  conditions  affecting  said  lines  are  different, 

(c)  That  the  delegates  from  countries  on  the  east  coast  of  South  America  and 
the  delegate  from  Chile  should  present  their  views  on  the  question  separately. 

The  delegate  of  Peru,  Dr.  Alzamora,  stated  that,  notwithstanding  he  concurs 
in  the  proposition  of  the  delegate  of  Chile,  he  is  unable  to  sign  this  report,  be- 
cause he  has  no  instructions  from  his  Government,  having  been  accredited  to 
the  conference  by  cable. 

The  delegate  of  Ecuador,  Dr.  Gonzales,  approves  the  general  idea  of  the 
Chilean  delegate,  but  he  can  not  sign  the  report,  lacking  the  necessary  authoriza- 
tion from  his  Government. 

The  delegate  of  Chile  is  of  opinion  that  the  conference  may,  nevertheless, 
recommend  to  the  interested  Governments  that  a  fast  maritime  transportation 
service  between  the  ports  of  South  and  North  America  may  be  supplied  as 
follows : 

(1)  By  the  organization  of  a  large  company,  subscription  to  the  capital  of 
which  may  be  made  by  the  public,  the  balance  of  the  stock,  if  any,  to  be  taken 
by  the  Government  of  the  United  States  and  the  Governments  of  those  Latin- 
American  Republics  interested,  in  a  proportion  to  be  agreed  upon. 

(2)  The  company  to  be  incorporated  under  the  New  York  laws,  but  the  steam- 
ers to  be  registered  In  the  different  countries  in  proportion  to  the  capital  sub- 
scribed, and  shall  fly  the  flag  of  said  country. 

(3)  For  the  purposes  of  customs  laws  the  steamers  to  be  considered  as  of  the 
nationality  of  the  port,  except  the  coastwise  trade,  in  those  countries  where  that 
trade  is  reserved  for  nationals. 

(4)  The  vessels  to  fulfill  certain  conditions,  e.  g.,  minimum  tonnage  of  5,000 
tons;  minimum  speed  of  16  miles  per  hour. 

(5)  The  board  of  directors  shall  be  composed  of  representatives  appointed  by 
the  respective  countries  in  proportion  to  the  capital  subscribed. 

(6)  The  payment  of  the  capital  subscribed  may  be  made  in  cash  or  by  transfer 
of  vessels  belonging  to  the  Government  subscribing  provided  said  vessels  are 
suitable. 

(Signed)  VEEGABA. 

The  transportation  committee  recognizes  the  paramount  impor- 
tance of  the  transportation  question  and  believes  that  the  establish- 
ment of  improved  regular  facilities  is  an  imperative  necessity  to  the 
expansion  of  the  commercial  and  financial  relations  between  the 
United  States  and  the  Republics  of  South  and  Central  America. 

The  committee  further  realizes  the  complexity  of  the  problems 
which  the  subject  involves  and  recommends  as  an  aid  to  their  solution 
the  reports  of  the  subcommittees  representing  the  east  and  west 
coasts  of  South  America,  with  its  approval  of  the  general  suggestions 
contained  in  such  reports. 

It  earnestly  recommends  the  serious  consideration  of  such  sugges- 
tions as  practical  propositions  tending  toward  a  prompt  solution  of 
the  problems  presented. 

In  order  to  insure  continuous  action  and  to  avoid  delays  it  recom- 
mends the  appointment  by  the  chairman  of  the  Pan  American  Finan- 
cial Conference  of  a  permanent  committee,  to  be  composed  of  repre- 
sentatives from  the  United  States  and  from  Argentina,  Brazil,  Uru- 


EEPOETS   OF   GENERAL   COMMITTEES.  309 

guay,  Chile,  Ecuador,  and  Peru.  It  should  be  the  duty  of  this  com- 
mittee to  obtain  and  furnish  information  pertinent  to  the  subject  and 
to  take  such  other  steps  as  in  its  discretion  may  seem  fit  or  necessary 
to  put  into  effect  the  plans  outlined  in  the  reports  of  the  subcom- 
mittees above  alluded  to  and  further  to  consider  and  report  to  the 
chairman  of  the  Pan  American  Financial  Conference  any  other  feas- 
ible, effective  plan  for  the  establishment  of  the  desired  expansion  of 
shipping  facilities. 

In  conclusion,  it  is  the  unanimous  conviction  of  the  committee  that 
such  plans  should  be  adopted  as  will  most  speedily  establish  direct, 
effective,  and  permanent  transportation  facilities  between  the  United 
States  and  the  Republics  of  South  and  Central  America. 

Washington,  D.  C.,  May  28,  1915. 

(Signed)  S.  HALE  PEARSON,  Chairman. 

R.  C.  ALDAO. 
V.  VILLAMIL. 

JOHN  E.  ZlMMERMANN. 

AMARO  CAVALCANTI. 

L.  IZQUIERDO. 
AUGUSTO  VlLLANUEVA. 

GONZALO  VERGARA  BULNES. 
VICENTE  GONZALES. 
ISAAC  ALZAMORA. 
EDUARDO  HIGGINSON. 
PEDRO  Cosio. 
GABRIEL  TERRA. 
CARLOS  MARIA  DE  PENA. 
DAVID  R.  FRANCIS. 
EDWARD  N.  HURLEY. 
FRANKLIN  Q.  BROWN. 
PAUL  FULLER. 
GEORGE  W.  NORRIS. 
R.  GOODWIN  RIIETT. 
SOL  WEXLER. 
HARRY  A.  WHEELER. 
J.  G.  WHITE. 

CLAUD  DE  BAUN,  Committee  Secretary. 


GROUP  CONFERENCE 
REPORTS 


311 


ARGENTINA 


313 


ARGENTINA. 

GROUP  CONFERENCE  REPORT. 

Hon.  WILLIAM  G.  McAooo,  Secreta7*y  of  the  Treasury, 

Chairman  Pan  American  Financial  Conference. 

SIR:  The  committee  has  held  four  well-attended  conferences,  the 
Hon.  Samuel  Hale  Pearson  acting  as  chairman  of  the  meetings. 

There  was  a  very  full  review  of  the  topics  suggested  by  the  Honor- 
able Secretary  of  the  Treasury  and  a  discussion  of  those  points  in 
this  list  of  topics  which,  in  the  opinion  of  the  committee,  were  felt 
to  have  the  broadest  influence  upon  the  question  of  better  commercial 
relations  between  the  United  States  and  Argentina.  It  was  recog- 
nized by  the  committee  that  as  a  fundamental  proposition  the  only 
basis,  upon  which  commerce  and  banking  can  be  successfully  devel- 
oped must  necessarily  rest  upon  the  principle  of  fairness  and  a 
reciprocity  of  advantages. 

After  dealing  with  these  subjects  in  a  general  way  the  discussion 
centered  upon  the  following  general  headings : 

/.  Transportation. — With  a  view  to  establishing  more  regular  and 
quicker  transportation  facilities  for  the  movement  of  mails,  passen- 
gers, and  parcels,  i.  e.,  high-class  commodities. 

//.  Cheaper  telegraphic  communication. — In  connection  with  this 
subject  it  was  pointed  out  that  the  United  States  has  no  direct 
American  lines  with  Argentina  except  through  the  west  coast  cables 
in  connection  with  transandine  telegraph  lines.  Direct  cable  com- 
munication involves  cooperation  on  the  part  of  Brazil  as  well  as  on 
the  part  of  Argentina  and  the  United  States. 

///.  Trading  facilities. — In  this  connection  it  was  pointed  out  that 
it  would  be  futile  for  manufacturers  and  merchants  in  the  United 
States  to  attempt  to  increase  their  trade  with  Argentina  so  long  as 
they  were  compelled  to  deal  through  houses  representing  rival 
nations. 

This  subject  was  viewed  from  two  standpoints. 

First.  The  necessity  of  promoting  in  every  way  possible  and  by 
friendly  and  voluntary  arbitration  the  settlement  of  claims  or  dis- 
putes between  parties  engaged  in  commercial  transactions  between 

315 


316  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

the  two  countries.  The  committee  concluded  that  it  should  call  in 
the  assistance  of  the  United  States  Chamber  of  Commerce  and  the 
Buenos  Aires  Chamber  of  Commerce  to  recommend  to  their  respec- 
tive members  the  adoption  of  a  standard  form  of  agreement  in 
respect  to  settlement  of  trade  disputes  or  claims  by  arbitrators  ap- 
pointed by  these  chambers,  the  arbitration  in  each  case  to  be  held 
where  the  contract  was  to  have  been  fulfilled. 

The  committee  decided  that  the  arbitration  of  these  trade  disputes 
was  of  so  great  importance  that  the  two  Governments  should  be 
requested  to  give  this  proposal  the  force  of  law. 

The  committee  also  considered  in  this  connection  amendments  re- 
quired in  commercial  laws,  but  no  resolution  was  adopted,  because 
this  topic  had  already  been  referred  to  a  special  committee. 

Second.  The  necessity  for  the  establishment  in  Argentina  of 
American  wholesale  houses  and  of  exhibition  rooms  and  warehouses 
which  would  adequately  represent  and  make  known  the  manufactur- 
ers and  merchants  of  the  United  States.  This,  it  was  pointed  out, 
was  especially  necessary  in  facilitating  the  business  of  those  manu- 
facturers and  merchants  whose  foreign  trade  was  not  sufficiently 
large  to  justify  the  establishment  of  individual  branches. 

IV.  Increased  banking  facilities. — By  which  was  meant  facilities 
which  would  put  manufacturers  and  merchants  of  the  United  States 
on  a  parity  with  the  manufacturers  and  merchants  of  the  European 
countries  who  are  now  well  represented  with  banking  facilities. 

After  a  discussion  of  the  above  topics,  they  were  disposed  of  in  a 
concrete  manner  by  the  passage  of  resolutions  which  are  herein 
embodied. 

TRANSPORTATION. 

Whereas  in  order  further  to  develop  the  friendly,  personal,  politi- 
cal, and  commercial  relations  already  happily  established  between  the 
Argentine  Republic  and  the  United  States  of  America  it  is  the  unani- 
mous opinion  of  the  members  of  the  Argentine  group  committee  of 
the  Pan- American  Financial  Conference  that  increased  facilities  are 
essential  between  the  two  countries  for  the  interchange  of  passenger 
traffic  and  the  more  rapid  carrying  of  mails, 

Now,  therefore,  be  it  resolved,  That  the  special  committee  of  the  Pan 
American  Financial  Conference  to  consider  improvement  in  means  of 
transportation  and  communication  should  be  asked  to  recommend  to 
the  general  meeting  of  the  conference  the  passage  of  a  resolution 
recommending  that  the  respective  Governments  of  the  United  States 
and  the  countries  in  the  southern  part  of  South  America  should  be 
requested  to  cooperate  in  contributing  in  such  way  as  may  be  feasible 
and  expedient  toward  equalizing  the  increased  cost — as  compared 
with  operating  ships  between  European  and  the  United  States 
ports — of  wages,  officers'  salaries,  foods,  and  other  items  of  operating 
expenses  and  maintenance — with  a  view  to  securing  the  establishment 


GKOUP   CONFERENCE   REPORTS ARGENTINA.  317 

and  regular  operation  of  sufficiently  fast  mail  steamers,  with  ade- 
quate passenger,  mail,  and  high-class  cargo  accommodations,  between 
ports  in  the  United  States  and  ports  in  the  countries  so  cooperating. 

CHEAPER  TELEGRAPHIC  COMMUNICATION. 

Whereas  in  view  of  the  great  distance  and  slow  mail  facilities 
existing  between  the  Argentine  Republic  and  the  United  States,  the 
matter  of  quick  communication  between  the  two  business  communi- 
ties is  of  vital  importance  to  the  development  of  trade, 

Now,  therefore,  be  it  resolved,  That  this  conference  bring  to  the 
attention  of  the  Governments  of  both  nations  the  need  for  cheaper 
telegraphic  communication  and  that  they  be  urged  to  take  any  proper 
and  necessary  action  tending  toward  the  establishment  of  lower  rates 
for  direct  telegraphic  communication  in  cooperation,  when  desirable, 
with  other  Latin  American  countries. 

TRADING  FACILITIES    (ARBITRATION  OF  TRADE  DISPUTES) . 

Whereas  your  committee  believes  that  the  utilization  of  the  arbi- 
tration system  in  accordance  with  the  suggestion  of  the  Argentine 
delegate,  Dr.  Aldao,  will  prove  of  the  greatest  value  in  the  further 
development  of  the  commercial  relations  between  the  countries  repre- 
sented in  this  conference, 

Now,  therefore,  be  it  resolved,  That  this  conference  records  its  hearty 
approval  of  the  principle  of  arbitration  of  commercial  disputes  be- 
tween business  men  and  recommends  that  all  countries  here  repre- 
sented cooperate  in  the  establishment  of  such  a  system  as  soon  as  a 
practicable  plan  can  be  devised. 

TRADING  FACILITIES    (AMERICAN  TRADING  HOUSES  IN  ARGENTINA). 

Whereas  in  the  opinion  of  your  committee  it  would  facilitate  and 
assist  in  developing  sales  of  American  manufactured  goods  in  Argen- 
tina if  American  manufacturers  would  establish  adequate  wholesale 
or  jobbing  houses  and  proper  show  or  exhibition  rooms  and  ware- 
houses in  which  manufactured  goods  could  be  shown  to  prospective 
users  and  from  which  quick  deliveries  could  be  made, 

Noiv,  therefore,  be  it  resolved,  That  to  facilitate  and  expedite  the 
distribution  of  their  goods,  American  manufacturers  should  have 
legal  authority  to  cooperate  in  export  business  either  by  joint 
selling  arrangements  or  by  subscribing  to  securities  of  wholesale  or 
jobbing  companies  which  might  establish  and  operate  adequate  ware- 
houses and  showrooms  or  unite  in  such  other  cooperative  effort  as 
might  be  effective  in  developing  export  business. 

INCREASED    BANKING    FACILITIES. 

Resolved,  That  this  committee  favors  the  establishing  of  such 
banking  facilities  between  the  United  States  and  the  Argentine 
Republic  as  will  effect  a  more  intimate  and  reciprocal  relation  than 
now  exists,  based  upon  mutual  cooperation  and  profit. 


318  PAN   AMERICAN   FINANCIAL    CONFERENCE. 

The  committee  deeply  appreciates  the  opportunity  it  has  enjoyed 
of  meeting  together  and  discussing  these  important  subjects,  and 
only  regrets  that  the  time  at  its  disposal  has  been  entirely  inadequate 
to  do  full  justice  to  subjects  of  such  great  importance. 

This  committee  also  desires  to  take  this  opportunity  of  expressing 
its  hearty  appreciation  to  the  honorable  Secretary  of  the  Treasury, 
the  chairman  of  the  general  conference,  for  the  privileges  thus 
granted,  and  expresses  the  hope  that  the  relationships  thus  enjoyed 
may  not  only  ripen  into  cordial  friendships  but  lead  to  a  better 
understanding  of  the  problems  and  mutual  interests  of  the  twr 
nations. 

Respectfully  submitted. 

SAMUEL  HALE  PEARSON,  Chairman. 


BOLIVIA 


311) 


BOLIVIA. 


GKROTIP  CONFERENCE  REPORT. 


Hon.  WILLIAM  G.  McAooo,  Secretary  of  the  Treasury, 

Chairman  Pan  American  Financial  Conference. 
SIR  :  A  very  full  statement  of  conditions  dealing  with  many  of  the 
questions  suggested  for  consideration  in  the  official  program  of  the 
Pan  American  Financial  Conference  was  prepared  by  the  delegates 
from  Bolivia  prior  to  the  opening  of  the  Conference,  as  well  as  a 
separate  report  upon  Bolivian  finances,  which  latter  report  by  reso- 
lution of  the  group  committee  has  been  appended  to  and  made  a 

part  of  this  report.* 

After  a  general  discussion  the  committee  was  divided  into  two 
subcommittees — one  to  consider  the  problems  of  trade  and  commerce 
and  the  other  the  banking  and  general  financial  situation  of  Bolivia — 
and  this  report  is  accordingly  made  under  these  two  subdivisions. 

I.  TRADE  AND  COMMERCE. 

Natural  resources. — Owing  to  the  extent  of  its  territory,  Bolivia 
has  a  great  variety  of  natural  resources  which  remain  almost  wholly 
undeveloped. 

Minerals. — Among  the  most  important  minerals  of  Bolivia  not 
found  in  the  United  States,  but  in  great  demand  in  this  country,  are 
antimony,  tungsten,  bismuth,  and  tin,  this  last  one  representing  the 
main  and  most  important  of  the  country's  exports  as  well  as  its 
principal  source  of  revenue.  It  is  hard  to  explain  why  the  United 
States,  being  so  great  a  consumer  of  tin,  has  never  made  any  real 
effort  to  import  it  from  Bolivia ;  but  two  reasons  at  least  are  evident — 
the  one  is  the  want  of  smelting  plants  to  treat  the  tin  concentrates 
and  the  other  is  the  high  rate  of  freight  and  lack  of  good  ocean 
transportation  facilities.  The  Isthmus  of  Panama  was  the  main 
obstacle  to  direct  and  cheap  communication  with  the  western  coast 
of  South  America,  but  the  opening  of  the  Panama  Canal  has  re- 
moved this  obstacle,  and  it  is  now  possible  to  bring  freight  to  the 

*  See  Exhibit  A,  page  327. 
98257  °  —15 21  321 


322  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

Atlantic  ports  of  the  United  States  from  this  region  without  trans- 
shipment. 

The  four  important  minerals  mentioned  above  have  hitherto  been 
imported  by  the  United  States  from  Europe  principally,  and  the 
present  commercial  conditions  resulting  from  the  war  in  Europe 
make  self-evident  the  advisability  of  the  United  States  developing 
a  source  of  supply  of  these  minerals  independent  of  Europe  and 
such  as  is  afforded  by  Bolivia. 

The  exploitation  of  the  mines  and  their  development  requires 
capital  and  offers  a  field  of  profitable  investment  to  American  finan- 
ciers and  miners, 

Besides  the  minerals  above  mentioned  as  not  found  in-  the  United 
States,  Bolivia  is  also  rich  in  copper,  zinc,  and  lead  mines,  and  the 
present  limited  production  of  all  of  these  metals  would  be  consider- 
ably increased  if  sufficient  capital  were  found. 

Live  stock. — Becent  estimates  of  the  live  stock  found  in  two  States 
in  the  eastern  part  of  Bolivia  place  the  number  at  80.000  wild  and 
20,000  domestic  cattle  in  the  Province  of  Santa  Cruz  and  130,000 
wild  and  50,000  domestic  cattle  in  the  Province  of  Beni.  This  gives 
some  idea  of  the  possibilities  of  developing  the  cattle  business  on  a 
large  scale.  The  area  covered  by  the  grazing  fields  is  larger  than 
the  whole  State  of  Texas,  and  before  epidemics  killed  off  some  of 
the  wild  cattle  the  number  was  very  large.  In  the  high  plateau 
region  of  Bolivia  is  found  a  number  of  kinds  of  sheep,  alpaca,  and 
vicuna,  whose  wool  and  skin  are  valuable  articles  of  trade.  Capital 
is  also  needed  to  develop  this  branch  of  Bolivian  resources,  and  rail- 
roads must  be  built  to  cheapen  transportation. 

Rubber,  timber,  and  fruit. — Rubber  is  one  of  the  most  important 
products  of  Bolivia.  Its  exportation  has  grown  steadily,  and  in  1913 
nmounted  to  more  than  5,000  tons.  The  Bolivian  forests  in  the  east- 
ern part  of  the  country,  tapped  by  great  navigable  rivers,  are  very 
rich  in  rubber  trees,  as  well  as  containing  many  varieties  of  cabinet 
woods.  What  is  said  above  as  to  the  desirability  of  the  United  States 
developing  sources  of  supply  of  metals  independent  of  Europe  ap- 
plies with  even  greater  force  to  the  rubber  industry  where  there  is  the 
added  factor  of  the  destruction  or  failure  of  trees  in  the  rubber  fields 
in  other  parts  of  the  world.  In  this  same  region  where  rubber  is 
found,  coffee,  cocoa,  and  all  kinds  of  tropical  fruits  are  abundantly 
produced,  but  can  not  be  exported  for  want  of  transportation 
facilities. 

Railroads. — The  vast  possibilities  of  Bolivia  have  been  thus  out- 
lined to  call  the  attention  of  American  capital  and  enterprise  to  the 
country's  need  of  a  more  complete  system  of  railroads  than  it  has  at 
present.  Railroads  from  the  present  centers  of  population  to  the 
eastern  section  of  the  country  are  of  vital  necessity,  and  no  greater 


GROUP   CONFERENCE   REPORTS BOLIVIA.  323 

impetus  could  be  given  to  the  development  of  that  country  than  to 
carry  out  the  construction  of  proposed  railroads  to  that  section.  By 
reason  of  the  fertility  of  the  soil  immigrants  would  find  there  pros- 
perous homes  and  encouraging  returns  for  their  labor.  Moreover, 
railroad  building  would  greatly  increase  trade  relations  between  the 
United  States  and  Bolivia  and  by  making  available  the  untouched 
wealth  of  that  country  would  open  a  profitable  field  for  the  invest- 
ment of  American  capital. 

Interior  navigation. — The  eastern  section  of  Bolivia  being  tapped 
by  a  network  of  large  navigable  rivers  flowing  into  the  Amazon,  a 
line  of  steamers  from  New  York  via  the  Amazon  might  well  be 
established  to  reach  this  section  of  Bolivia. 

Ocean  transportation. — We  feel  that  increased  and  improved  ocean 
transportation  is  an  essential  necessity  for  trade  improvement. 

Foreign  debts. — As  stated  in  the  memorandum  submitted  by  the 
Bolivian  delegates,  Bolivia  had  no  foreign  debt  up  to  1908,  when  a 
loan  of  £500,000  was  negotiated  in  this  country,  and  two  years  later 
another  loan  for  £1,500,000  was  placed  in  Paris,  and  later  on  a  third 
and  last  loan  for  £1,000,000  was  also  placed  in  Paris.  All  these  loans 
were  negotiated  for  remunerative  purposes,  such  as  the  organiza- 
tion of  a  national  bank,  the  construction  of  a  railroad,  and  other 
public  utilities.  Bolivia  has  met  regularly  all  its  obligations.  The 
interest  on  the  foreign  loans  and  the  internal  debt  does  not  take  more 
than  23  per  cent  of  the  national  revenues. 

Political  situation. — The  country,  politically  speaking,  is  per- 
fectly peaceful  and  the  regularity  of  its  administration  is  evidenced 
by  .its  sound  financial  standing. 

Commercial  laws  and  regulations. — We  believe  that  through  the 
proper  diplomatic  channels  there  should  be  brought  about  a  modifica- 
tion of  the  laws  and  regulations  now  existing  with  regard  to  trade- 
marks, duties  and  taxes  levied  upon  samples  and  against  commercial 
travelers,  with  a  view  to  guaranteeing  American  patent  and  trade- 
mark rights,  and  making  duties  and  taxes  more  liberal.  Moreover, 
we  would  advocate  the  abolishment  of  any  duties  on  advertising 
matter  that  is  not  imported  for  sale. 

The  committee  cordially  indorses  the  recommendation  of  the  Post- 
master General  of  the  United  States  that  postal  rates  of  the  United 
States  be  made  applicable  to  the  Latin- American  countries  upon  a 
reciprocal  basis  and  that  a  parcel  post  and  money-order  system  be 
likewise  established. 

It  is  the  opinion  of  the  committee  that  the  establishment  of  tele- 
graphic or  wireless  communication  between  the  United  States  and 
Central  and  South  America  owned  and  controlled  by  citizens  of 
North,  South,  and  Central  America  would  have  a  tendency  to  facili- 
tate and  promote  inter- American  trade  and  commerce.  The  present 


324  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

rates  appear  to  be  unusually  exorbitant,  and  this  means  of  com- 
munication under  existing  conditions  is  necessarily  limited  to  the 
more  important  commercial  transactions. 

In  the  interest  of  a  better  understanding  of  conditions  the  com- 
mittee urgently  recommends  that  the  press  associations  of  the  sev- 
eral countries  give  consideration  to  the  question  of  establishing  a 
proper  system  for  the  interchange  of  news,  particularly  that  which 
relates  to  trade  and  commerce. 

It  is  also  recommended  that  proper  steps  should  be  taken  to 
standardize  as  far  as  possible  trade  requirements  of  the  several  coun- 
tries, and  if  proper  bureaus  can  be  established  for  this  purpose  the 
standards  adopted  should  be  recognized  by  manufacturers  and 
producers. 

II.  BANKING  AND  FINANCE. 

Public  -finance. — As  shown  in  the  statement  submitted  by  the 
Bolivian  delegates  and  printed  in  the  appendix,  the  revenues  of  the 
Government  of  Bolivia  are  derived  primarily  from  export  and 
import  duties.  These  revenues  are  supplemented  by  certain  local 
taxes  and  excise  duties.  There  is  attached  to  and  made  a  part  of 
this  report  a  copy  of  statement  furnished  the  committee  by  the 
Bolivian  delegates  showing  the  revenues  and  expenses  of  the  Gov- 
ernment of  Bolivia  from  the  year  1904  to  1913,  inclusive ;  also  state- 
ment of  foreign  debt  as  of  June  30,  1914,  and  statement  of  inland 
debt  for  the  same  period.* 

To  meet  the  depletion  in  revenues  incident  to  the  European  war 
it  was  necessary  for  the  Government  to  reduce  salaries  of  all  Govern- 
ment officials  30  per  cent,  to  supplement  its  revenues  by  the  adoption 
of  a  stamp  tax,  and  to  take  other  measures.  In  the  interest  of 
economy  it  was  found  necessary  to  suspend  the  operations  of  all 
legations  except  those  in  the  United  States  and  South  America. 

While  the  increase  in  exports  since  the  beginning  of  the  war  has 
relieved  the  situation  to  a  very  great  extent,  it  may  be  necessary  for 
the  Government  of  Bolivia  to  place  a  loan  with  investors  in  the 
United  States.  As  this  is  a  matter  for  the  consideration  of  private 
bankers  or  investors,  it  is  not  deemed  necessary  to  elaborate  in  this 
report  the  status  of  the  public  finances  of  Bolivia,  but  the  statement 
hereto  appended,  furnished  by  the  delegates  from  Bolivia,  contains 
a  very  clear  and  frank  resume  of  the  situation. 

The  monetary  situation. — The  Government  of  Bolivia  issues  no 
paper  currency.  The  English  pound  sterling  and  Peruvian  pound 
sterling  are  made  legal  tender  by  statute.  As  fully  explained  in 
the  appended  statement,  the  money  in  circulation  consists  primarily 

*  See  Exhibit  B,  page  331. 


GROUP   CONFERENCE   REPORTS BOLIVIA.  325 

of  bank  notes  issued  by  four  banks  mentioned  therein.  By  recent 
legislation  only  one  bank  will  have  the  note-issuing  power  after 
present  outstanding  notes  are  retired. 

The  Bolivian  Government  has  adopted  the  gold  standard,  but  does 
not  coin  any  gold  money.  It  is  the  sense  of  the  committee  that  the 
adoption  of  the  United  States  standard  of  value  by  the  Bolivian 
Government  is  not  practicable  at  this  time  by  reason  of  the  present 
trade  relations  with  other  Governments.  If,  however,  trade  with  the 
United  States  can  be  sufficiently  developed  to  create  a  proper  credit 
balance  with  the  United  States,  with  a  resultant  demand  for  Amer- 
ican dollars  to  make  settlement  of  trade  balances,  there  seems  to  be 
no  reason  why  ultimately  they  should  not  be  made  legal  tender  for 
all  purposes. 

In  the  meantime  it  would  have  a  tendency  to  promote  the  develop- 
ment of  trade  relations  and  to  popularize  the  American  dollar  in 
Bolivia  if  by  legislation  it  can  be  made  legal  tender  by  the  Bolivian 
Government  for  the  payment  of  taxes  and  impost  duties.  It  would 
likewise  contribute  to  this  end  if  arrangements  could  be  made  with 
the  proper  authorities  by  which  American  gold  certificates  and  drafts 
on  banks  in  the  United  States  could  be  accepted  in  payment  of  such 
taxes  and  imposts,  and  as  an  incident  to  such  an  arrangement  New 
York  exchange  should  be  quoted  daily  in  the  principal  centers  of 
Bolivia  and  Bolivian  exchange  quoted  in  New  York. 

The  present  banking  situation. — The  appended  statement  sets  forth 
fully  and  clearly  the  banking  situation  of  Bolivia  and  furnishes  very 
convincing  evidence  of  the  possibilities  of  development  of  the  bank- 
ing business  along  conservative  lines. 

In  the  opinion  of  the  committee  the  establishment  of  a  bank  pos- 
sessing the  necessary  charter  powers  to  meet  local  trade  conditions, 
the  capital  for  such  bank  to  be  furnished  jointly  by  citizens  of  Bo- 
livia and  citizens  of  the  United  States,  is  very  desirable.  Such  an 
institution  could  be  made  a  strong  factor  in  developing  trade  be- 
tween the  two  countries.  A  commercial  department  could  collect, 
analyze,  and  furnish  proper  credit  information,  and  could,  by  guar- 
anty of  local  credits,  be  instrumental  in  obtaining  capital  for  local 
development.  It  is  not  believed  that  a  branch  of  one  of  the  national 
banks  of  the  United  States  would  possess  the  necessary  charter 
powers  to  enable  it  to  conform  to  local  conditions  and  requirements. 

Financing  of  public  improvements. — It  is  the  opinion  of  the  com- 
mittee that  the  successful  financing  of  national  and  provincial  loans 
necessitates  the  adoption  of  some  satisfactory  medium  for  dissemi- 
nating information  as  to  the  true  status  of  conditions  in  Bolivia. 
In  order  for  any  bank  or  syndicate  to  underwrite  such  loans  the 
public  of  the  United  States  should  have  a  better  understanding  of 


326  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

the  true  conditions.  Erroneous  impressions  have  in  the  past  been 
created  through  the  instrumentality  of  irresponsible  promoters  who 
have  obtained  doubtful  concessions  for  the  purpose  of  selling  them 
and  without  either  the  ability  or  intention  of  complying  with  the 
terms  of  such  concessions. 

Central  commercial  agency. — The  conference  about  to  close  will  un- 
doubtedly be  fruitful  of  results  in  many  ways,  but  to  obtain  speedily 
a  practical  realization  of  one  of  its  fundamental  purposes,  namely, 
the  improvement  and  growth  of  our  financial  and  commercial  rela- 
tions, this  committee  recommends  the  organization  of  a  central  com- 
mercial agency  to  conduct  its  operations  in  connection  with  or  under 
the  supervision  of  the  United  States  Chamber  of  Commerce.  Its 
purpose  would  be  to  disseminate  information  and  serve  as  a  connect- 
ing link  between  the  industries  of  the  different  American  countries 
and  the  United  States. 

Such  an  agency  could  be  established  after  a  careful  study  of  the 
reports  of  the  several  group  committees  showing  conditions  in  Cen- 
tral and  South  America  and  would  prove  a  valuable  medium  for  the 
investors  of  the  United  States  as  well  as  the  citizens  of  Central  and 
South  America  who  are  seeking  capital  for  legitimate  and  proper 
investment. 

The  delegates  from  Bolivia  give  every  assurance  that  agents  of 
responsible  investors  will  receive  the  cordial  cooperation  of  the 
Bolivian  Government  in  the  legitimate  promotion  of  any  proper  en- 
terprise, and  the  appended  memorandum  furnishes  abundant  infor- 
mation of  the  wide  field  for  profitable  investment  that  is  afforded  by 
the  undeveloped  resources  of  Bolivia. 

In  presenting  this  report,  accompanied  by  the  memoranda  of  the 
Bolivian  delegates,  we  must  express  our  earnest  wish  for  the  fulfill- 
ment of  our  hopes  for  the  peace,  friendship,  and  growth  of  the  com- 
mon interests  of  our  countries,  and  congratulate  the  Secretary  of 
the  Treasury  upon  the  success  of  his  worthy  endeavors. 

Respectfully  submitted. 

IGNACIO  CALDERON,  Chairman. 


EXHIBIT  A. 

MEMORANDUM  ON  BOLIVIAN  FINANCE. 
CURRENCY. 

Bolivia  is  perhaps  the  only  country  in  South  America  that  never 
has  had  paper  money.  Its  currency  at  present  is  based  on  the  gold 
standard,  established,  by  law  in  1908.  According  to  it,  and  until  it 
may  be  possible  to  mint  a  national  gold  coin,  the  English  sterling 
pound  and  the  Peruvian  gold  money  are  the  only  legal  tender. 

Bank  notes  are  generally  used  and  form  the  bulk  of  the  country's 
currency.  Silver  pieces  of  the  value  of  50  cents,  20  cents,  and  nickel 
money  of  5  cents  and  10  cents  denominations  supplement  the  cur- 
rency in  circulation.  Gold  is  very  scarce  and  the  banks  keep  it  in 
their  vaults  as  a  reserve  and  guaranty  for  their  notes,  the  law  re- 
quiring 40  per  cent  of  their  issues  to  be  represented  by  gold  coin. 
Legally  a  boliviano  is  the  unit  of  the  monetary  system ;  12.50  bolivi- 
anos are  considered  as  equivalent  to  a  pound  sterling.  The  silver 
pieces  in  circulation  are  50  cents,  of  10  grams  weight,  and  the  20-cent 
pieces,  of  4  grams  weight,  both  833  fine.  The  original  silver  bolivi- 
ano was  a  piece  of  425  grains  weight  and  900  fine,  but  it  is  not  coined 
any  more. 

BANKS. 

There  are  at  present  four  issue  banks  and  four  mortgage  banks, 
besides  agencies  of  a  German  bank  at  La  Paz  and  Oruro. 

In  1913  Congress  passed  a  law  restricting  to  one  bank  the  right 
to  issue  notes,  but  the  depression  caused  by  the  stringent  measures 
taken  by  the  banks  whose  notes  were  to  be  retired  compelled  Con- 
gress to  pass  a  law  last  November  to  extend  for  10  years  the  final 
retirement  of  all  the  then  outstanding  bank  notes. 

The  law  requires  keeping  as  a  guaranty  for  the  bank-notes  circu- 
lation 40  per  cent  of  their  amount  and  the  obligation  to  redeem  them 
for  gold  on  presentation,  a  requirement  not  always  enforced. 

The  combined  capital  of  the  four  banks  of  issue  is  as  follows: 


Name  of  bank. 

Acknowl- 
edged 
capital. 

Paid  up. 

Banco  Nacional  de  Bolivi. 
Banco  P.  Arganciona    ... 

i  (the  oldest  bank  of  Bolivia) 

Bolivianos. 
12,500,000 
12,500,000 
25,000,000 
25,000,000 

Bolivianos. 
8,000,000 
4,000,000 
10,000,000 
18,962,500 

Banco  Mercantil 

Banco  de  la  Nacito 

327 


328  PAN  AMERICAN   FINANCIAL   CONFERENCE. 

All  of  these  banks  pay  regularly  good  dividends  that  amount  on 
an  average  to  10  per  cent  annually. 

They  have  to  pay  8  per  cent  tax  on  their  net  earnings  and  one-half 
per  cent  on  the  average  circulation  of  their  notes. 

Notwithstanding  the  serious  crisis  caused  by  the  sudden  inter- 
ruption of  commercial  and  financial  activities  on  account  of  the 
war,  none  of  the  banks  failed  to  make  good  profits.  The  Banco 
Nacional  de  Bolivia,  after  deducting  all  charges  and  putting  aside 
the  annual  reserve,  paid  5  per  cent  semiannual  dividend  on  the  31st 
of  last  December. 

The  Banco  de  la  Nacion  earned  the  last  six  months  of  1914  over 
a  million  bolivianos,  but,  being  the  principal  provider  of  foreign 
drafts,  its  losses  on  account  of  the  drop  in  the  exchange  have  been 
very  heavy. 

The  war  in  Europe  has  caused  a  fall  in  exchange  from  18J  pence 
per  boliviano  to  about  15  pence.  This  bank,  being  a  Government 
depository,  has  had  occasion  to  appreciate  the  great  drop  in  the 
revenues  of  the  country  during  the  last  six  months  of  1914  and  to 
feel  the  reaction  that  has  commenced  owing  to  the  resumption  in  the 
exportation  of  tin. 

The  amount  of  bank  notes  in  circulation  decreased  in  1914  to 
21,490,713  from  24,490,535  bolivianos  in  1913. 

The  gold  in  cash  in  the  Banco  de  la  Nacion  in  December,  1914, 
was  £521,901,  that  at  the  legal  rate  of  12.50  bolivianos  per  pound  rep- 
resents 6,537,625  bolivianos  against  the  value  of  its  notes  in  circula- 
tion, 12,551,361  bolivianos,  which  represents  much  more  than  the  40 
per  cent  required  by  law. 

LOANS. 

fiolivia  has  been  free  from  foreign  debts  until  the  year  1908, 
when  the  first  one  was  contracted  with  J.  P.  Morgan  &  Co.  for 
£500,000  at  90  per  cent  and  6  per  cent  interest  plus  2  per  cent  amorti- 
zation. In  1910  a  loan  mainly  to  establish  a  bank  was  placed  in  Paris 
for  £1,500,000  at  87  per  cent  and  5  per  cent  interest  and  1.10  per 
cent  amortization.  Finally  in  1913  another  loan  for  £1,000,000  was 
placed  also  in  Paris  at  90  per  cent  and  5  per  cent  interest,  1  per  cent 
amortization.  This  loan  was  contracted  exclusively  for  a  railway 
construction  and  on  account  of  the  war  the  bankers  have  not  paid  it 
yet.  The  coupons  of  all  these  loans  have  been  regularly  met.  Bolivia 
has  also  an  internal  debt  that  amounts  to  approximately  1,155,000 
pounds  sterling. 

RAILWAYS. 

The  first  railway  in  Bolivia  was  inaugurated  in  1902,  and  is  known 
as  the  Antof  agasta-Bolivia  Railway,  and  belongs  to  an  English  com- 


GROUP   CONFERENCE  REPORTS BOLIVIA.  329 

pany.  Starting  from  the  port  of  Antofagasta,  in  Chile,  this  road 
reaches  Oruro,  a  city  in  Bolivia.  The  length  of  the  road  is  934  kilo- 
meters of  narrow  gauge. 

In  1900  the  Bolivian  Government  undertook  the  construction  of 
a  short  line  from  the  borders  of  Lake  Titicaca  to  La  Paz,  97  kilo- 
meters, which  was  opened  to  traffic  in  1903. 

In  1904  a  contract  was  made  in  New  York,  the  first  of  its  kind  ever 
made  by  any  South  American  country  with  American  capitalists,  for 
the  building  of  a  system  of  railroads  to  unite  the  north  and  south  of 
the  country  and  also  extend  them  to  the  eastern  section. 

After  completing  the  first  line  between  La  Paz  and  Oruro,  a  dis- 
tance of  217  kilometers,  the  contract  was  transferred  by  the  Amer- 
ican bankers  to  the  English  company  operating  the  Antofagasta 
road,  and  the  line  from  Oruro  to  Potosi  was  built  by  that  company, 
a  distance  of  322  kilometers. 

The  line  from  Oruro  to  Cochabamba,  209  kilometers,  is  still  under 
construction,  but  it  may  soon  be  finished. 

Another  line  from  Rio  Mulato  to  Tupiza,  241  kilometers,  to  con- 
nect with  the  Argentine  roads  in  the  Bolivian  frontier,  is  also  being 
built  and  will,  when  finished,  establish  an  all-rail  communication 
between  La  Paz  and  Buenos  Aires. 

All  the  work  of  these  lines  has  been  carried  through  with  the 
£2,000,000  contributed  by  the  Government  and  £3,000,000  by  the 
bankers. 

Unfortunately,  other  very  important  and  necessary  roads,  such  as 
the  road  from  La  Paz  to  the  Beni  River,  from  Puerto  Suarez  on  the 
Paraguay  River  to  Santa  Cruz,  etc.,  remain  in  project,  and  they  are 
not  only  absolutely  necessary  but  would  develop  the  richest  and 
most  promising  sections  of  Bolivia. 

MINES. 

For  the  present  and  notwithstanding  the  great  agricultural  possi- 
bilities in  Bolivia,  mining  is,  and  has  been  ever  since  the  Spanish 
conquest,  the  main  industry  in  Bolivia.  The  country  is  one  of  the 
richest  in  the  world  in  mineral  resources.  Silver  has  been  for  over 
four  centuries,  commencing  with  the  early  days  of  the  Spanish  con- 
quest, one  of  the  most  important  products.  The  Spaniards  found  it 
so  valuable  that  they  established  in  Potosi  the  second  mint  in  all 
America  for  coining  money,  the  other  being  that  of  Mexico. 

Now  tin  has  taken  a  very  commanding  place  amongst  the  exports 
of  Bolivia,  amounting  to  over  44,000  tons  of  concentrates.  There  are 
also  rich  mines  of  copper,  bismuth,  cobalt,  zinc,  antimony,  gold,  etc. 
Lately  important  petroleum  deposits  have  been  found  in  many 
sections  of  the  country. 


330  PAN    AMERICAN    FINANCIAL   CONFEEENCE. 

INTERNATIONAL.    TRADE. 

The  growth  of  Bolivia  and  its  possibilities  can  be  appraised  by  the 
growth  of  its  foreign  trade,  notwithstanding  all  the  drawbacks  of  the 
lack  of  means  of  transportation  and  of  population. 

In  1902  the  total  export  and  import  trade  reached  only  to  about 
£3,200,000  a  year.  In  1913  it  reached  the  sum  of  about  £11,450,000. 

The  bulk  of  the  exports  went  to  England,  Germany,  France,  and 
Belgium.  The  United  States  received  only  $392,245,  and  sent  to 
Bolivia  from  three  to  four  million  dollars  in  round  numbers. 

PUBLIC    REVENUES. 

The  public  revenues  of  Bolivia  have  also  grown  considerably. 
They  are  derived  principally  from  the  export  and  import  duties.  Tin 
and  rubber  are  the  principal  articles  of  export,  and  as  both  have  been 
almost  stopped  on  account  of  the  war  the  revenues  of  the  country 
have  fallen  considerably,  making  it  necessary  to  take  some  measures 
to  retrench  expenses  in  every  way.  Salaries  have  been  reduced 
30  per  cent  and  almost  every  public-utilities  work  has  been  stopped. 
Moratoria  for  a  few  months  were  decreed,  and  as  the  price  of  food- 
stuffs commenced  to  get  very  high  the  Government  imported  large 
quantities  of  flour  and  took  other  measures  to  meet  the  emergency. 

GENERAL   REMARKS. 

The  territory  of  Bolivia  is  third  in  extent  after  Argentina  and 
Brazil,  but  its  population  is  only  about  two  million  and  a  half.  The 
country  is  perfectly  peaceful  and  orderly.  The  President  is  elected 
for  four  years  without  reelection,  and  foreigners  enjoy  every  right 
granted  by  the  constitution  to  the  natives. 

The  mining  laws,  the  immigration  laws,  and  the  public  land- 
grant  laws  are  most  liberal.  No  country  offers  a  better  field  for 
large  enterprises  on  account  of  the  rich  natural  products,  so  abundant 
in  mineral  as  well  as  in  all  other  branches  of  industry.  Capital  is 
urgently  needed  to  utilize  the  natural  wealth  which  is  ready  to  yield 
handsome  returns. 

Besides  the  mineral  resources  in  the  high  plateaus,  the  eastern 
section  of  Bolivia  is  wonderfully  rich  in  fertile  lands  for  grazing 
and  agriculture  and  virgin  forests  watered  by  many  large  and  navi- 
gable rivers.  The  study  of  the  country  and  its  possibilities  would 
reveal  how  great  is  its  future  and  how  profitable  it  would  be  to  help 
its  development  by  the  liberal  employment  of  capital  and  the  settle- 
ment of  immigrant  colonies. 

This  very  rapid  sketch  of  Bolivia,  deficient  as  it  is,  no  doubt  will 
awaken  the  interest  of  financiers  and  industrial  men  to  its  pos- 
sibilities as  a  field  for  investment. 


GROUP   CONFERENCE   REPORTS BOLIVIA. 


331 


EXHIBIT  B. 

National  revenues  during  the  last  decade  1904-1913. 


Year. 

Revenues. 

Year. 

Revenues. 

1904 

Bolivianos. 
6.838,576 

1909. 

Bolivianos. 
11,847,231 

1905 

7  854  698 

1910                      .     .                     

12,583,232 

1906 

10.  401,  512 

1911  

16,913,512 

1907 

13  166,684 

1912  

20,164,602 

1938 

11  604  063 

1913            .              

22,018,874 

The  above  table  shows  an  increase  of  230%  during  the  said  decade. 

The  annual  departmental  revenues  may  be  estimated  at  3,000,000  bolivianos. 

Amounts  in  bolivianos  required  for  the  payment  of  interests  on  all  debts  and  for  their 

redemption. 

Guarantee  of  "  Bolivia  Railway  "  bonds 750, 000 

Guarantee  of  ' '  Cochabamba  Light  &  Power ' '  bonds 225,  000 

For  interest  on  and  redemption  of  other  loans 3,  360,  62Q 


Total 4,335,620 

As  the  national  revenues  amount  to  a  total  of  22,018,874  bolivianos,  the  above 
expenditure  represents  less  than  20  per  cent  of  the  same,  which  is  certainly  a  very 
significant  proportion. 

Statement  of  foreign  debt  on  June  30,  1914. 


Date  of  act 
authorizing 
the  loan. 

Loans. 

Inter- 
est. 

Re- 
demp- 
tion. 

Issued 
at— 

Bankers. 

Principal 
amounts 
issued. 

Balances  in 
bolivianos 
gold  cy. 
at  19  1/55. 

Nov.  28,1908 
Feb.    3,1910 
Dec     5  1912 

Morgan  loan,1909. 
French  loan,  1910. 
F  C  Tupiza  La 

Per  ct. 
6 

5 
5 

Per  ct. 
2 

1.10 
1 

Per  ct. 
90 

87 
90 

J.  P.  Morgan  & 
Co. 
Credit  Mobilier 
Francais. 
do  

£500,000.00 
1,500,000.00 
1,000,000.00 

5,473,280.83 
17,986,250.00 
12,378,750.00 

3,000,000.00 

35,838,280.83 

Statement  of  inland  debt  on  June  30,  1914. 


Date  of  act 
authorizing  the 
loan. 

Public  debts. 

Re- 
demp- 
tion. 

In- 
terest. 

Total  issue. 

Balances 
on  June  30, 
1914. 

Total 
indebtedness. 

Jan  17  1907 

Inland  loan  bonds      .... 

Pr.ct. 
1 

Pr.ct. 
3 

Bolivianos. 
4,  826,  300.  00 

Bolivianos. 
1,453,225.00 

Bolivianos. 
2,711,195.81 

Feb.  5/1910  

VMilitary  bonds,  old  issue. 

8 

348,200.00 

144,000.00 

144,000.00 

Dec.  15,  1909  
Jan.  18,1911  
U.S.,  May  2,  1911. 
Jan.  22,  1914  

\  Acre  and   Pacific    mili- 
/    tary  bonds. 
Acre  indemnity  bonds.  .  . 
Government    bonds    of 

2 

3 
1 

8 

3 

8 

2,077,000.00 

202,500.00 
2,775,000.00 

1,985,400.00 

190,000.00 
2,775,000.00 

2,099,412.40 

426,898.27 
2,775,000.00 

10,229,000.00 

6,547,625.00 

8,156,506.48 

BRAZIL 


333 


BRAZIL. 


GROUP  COHERENCE  REPORT. 


Hon.  WILLIAM  G.  McADOO,  Secretary  of  the  Treasury, 

Chairman  Pan  American  Financial  Conference. 

SIR:  The  committee  over  which  I  have  the  honor  to  preside,  in 
order  to  give  more  careful  consideration  to  the  questions  proposed 
for  discussion,  was  divided  into  two  subcommittees,  one  on  banking 
and  laws  relating  thereto,  and  the  other  on  trade  and  commerce  and 
laws  relating  thereto. 

The  committee  on  banking  was  composed  of  the  following-named 
gentlemen:  Messrs.  Paul  M.  Warburg,  chairman,  W.  S.  Kies,  Fre- 
derico  Lage,  James  B.  Forgan,  and  John  Bassett  Moore. 

The  committee  on  trade  and  commerce  was  composed  of  Messrs. 
Caesar  Cone,  chairman,  Charles  Sutter,  E.  W.  Rice,  jr.,  E.  P.  Thomas, 
E.  Q.  Horton,  and  Arthur  W.  Jones. 

The  reports  of  these  two  subcommittees  have  been  considered  by 
the  General  Committee  and  were  unanimously  adopted  as  a  part  of 
its  report.  The  reports  are  here  presented,  as  follows : 

BANKING. 

The  subcommittee  appointed  by  the  Brazilian  group  for  the  con- 
sideration of  the  subject  of  banking  in  general  submits  the  following 
report : 

The  subject  of  banking  should  be  considered  under  two  heads — • 
Government  and  corporate  financing,  and  commercial  banking. 
There  have  been  submitted  to  the  conference  very  explicit  reports 
covering  the  first  subject,  and  it  would  be  mere  repetition  to  con- 
sider this  particular  subject  at  length.  Commercial  banking  should 
properly  be  considered  under  two  heads:  (1)  Financing  transactions 
involving  the  importation  and  exportation  of  goods;  (2)  local 
commercial  banking. 

Financing  transactions  involving  importation  and  exportation  of 

goods. 

The  present  offers  large  opportunities  for  the  development  of  the 
acceptance  business  between  Brazil  and  the  United  States,  and 
through  this  development  an  increase  in  the  exchange  of  products 

335 


336  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

between  Brazil  and  North  America.  This  acceptance  business  can 
now  be  undertaken  by  all  American  banks  and  bankers  of  standing 
and  responsibility,  no  matter  whether  they  have  branches  or  not.  It 
is  merely  a  question  of  establishing  business  relations,  which  of 
necessity  will  require  time  to  develop.  In  view  of  present  conditions 
in  Europe  which  render  it  necessary  that  relief  be  given  promptly 
and  liberally,  every  effort  should  be  made  to  develop  comprehensive 
business  connections  as  rapidly  as  possible. 

The  branches  of  American  banks  thus  far  established  in  Brazil 
should  be  of  great  service  in  furnishing  needed  commercial  infor- 
mation and  in  acting  as  agencies  for  the  development  of  commerce. 
These  branches  should  be  in  a  position  to  serve  as  the  media  for 
building  up  the  acceptance  business,  not  only  in  behalf  of  the  parent 
banks  but  should  act  broadly  for  all  banks  in  their  own  country. 
Considering  the  centralization  of  the  coffee  business  in  parts  of 
Brazil  and  of  rubber  in  other  portions  in  the  hands  of  large  ship- 
pers, the  amounts  involved  in  financing  the  marketing  of  these  com- 
modities are  so  large  that  it  may  be  necessary  for  groups  of  Ameri- 
can bankers  to  act  together  to  obtain  satisfactory  results. 

Both  the  large  Brazilian  and  American  commission  houses  and 
the  American  export  and  import  firms  should  do  their  share  in 
facilitating  the  establishment  of  new  relations.  These  concerns  will 
primarily  profit  from  the  establishment  of  a  broader  discount  and 
acceptance  market  in  America,  and  should  in  every  possible  manner 
cooperate  in  an  effort  to  bring  about  the  desired  results. 

Inasmuch  as  a  committee  of  the  conference  has  been  appointed  to 
consider  the  subject  of  trade  laws,  this  committee  does  not  desire 
to  enter  into  a  discussion  on  that  subject.  We  may  point  out,  how- 
ever, that  the  development  of  banking  relations  will  be  greatly  aided 
by  more  definite  regulations  and  a  clearer  definition  of  the  legal 
status  of  acceptances,  indorsements,  and  protests  of  commercial 
paper,  bankruptcy  procedure,  warrants  and  warehouse  receipts,  and 
the  establishment  of  a  more  comprehensive  system  of  warehouses. 
There  is  no  doubt  that  a  large  amount  of  American  money  can  be 
made  to  flow  to  South  American  countries  if  reliable  warrants  of 
reliable  warehouse  companies  can  be  given  the  status  of  negotiable 
paper,  as  in  this  country,  and  can  be  freely  accepted  by  banks  as 
collateral  without  risk. 

Local  commercial  'banking. 

The  branches  of  American  banks  now  open  and  others  which  it  is 
hoped  will  be  opened  will  be  able  to  render  important  service  in  their 
communities  by  gradually  taking  up  the  local  banking  business  in 
the  same  manner  as  is  done  by  existing  domestic  and  foreign  banks. 

Your  committee  believes  that  the  United  States  should  encourage 
in  every  possible  manner  the  opening  of  further  branches,  and,  if 
found  advisable,  to  broaden  the  banking  laws  so  as  to  permit  the 
establishment  of  branches  representing  groups  of  banks. 

As  commerce  increases  between  the  Americas,  it  may  be  found 
advisable  to  widen  the  powers  of  American  banks  and  thus  put  them, 
as  far  as  possible,  in  a  position  to  compete  successfully  with  foreign 
banks. 


GROUP   CONFERENCE   REPORTS BRAZIL.  337 

Your  committee  is  confident  that  the  American  branches  will  use 
their  best  endeavors  to  develop  this  local  commercial  business  as 
rapidly  as  it  can  possibly  be  done;  but  it  must,  of  course,  be  borne 
in  mind  that,  at  first,  progress  in  the  development  of  these  banking 
relations  must  of  necessity  be  slow  until  the  managers  of  these 
branches  familiarize  themselves  with  local  conditions.  Banking  of 
this  nature  depends  entirely  upon  confidence  based  upon  mutual 
acquaintance  and  each  banking  transaction,  will  require  close  study 
of  the  financial  and  commercial  conditions  underlying  the  propo- 
sition. 

Large  results  can  only  be  achieved  if  business  is  built  up  in  each 
case  upon  a  safe  foundation,  and  this  can  only  be  done  where  there 
is  a  spirit  of  mutual  helpfulness  and  information  concerning  financial 
conditions  is  freely  given. 

It  must  be  remembered  that  local  banks  and  the  foreign  banks 
now  operating  in  Brazil  have  an  extensive  knowledge  based  on  an 
experience  obtained  during  a  long  period  of  years,  and  that  the 
standing  of  would-be  borrowers  is  well  known  to  them.  New  banks 
entering  the  field  should  receive  all  possible  assistance  so  that  they 
may  equip  themselves  in  as  short  a  period  of  time  as  possible  for  the 
doing  of  the  necessary  local  business.  The  success  of  American 
branches,  in  so  far  as  they  shall  be  expected  to  participate  in  the 
purely  local  banking  business  of  the  country,  will  depend  very 
largely  upon  that  degree  of  cooperation  which  shall  be  accorded  them 
by  the  people  of  Brazil.  "While  American  banks  entering  Brazil 
must  realize  that  they  will  have  to  accommodate  themselves  to 
Brazilian  usages  and  customs,  it  may  also  be  said  that  the  Brazilian 
business  man  will,  to  a  certain  extent,  be  obliged  to  consider  Ameri- 
can customs.  The  fact  must  not  be  overlooked  that  branches  of 
American  national  banks  are  restricted  in  their  operations  by  the 
laws  of  the  United  States  under  which  they  are  organized.  These 
banks  are  under  the  supervision  of  American  bank  examiners  and 
are  obliged  to  observe  certain  rules  as  to  the  liquidity  of  their  loans, 
as  to  the  amounts  which  they  are  permitted  to  lend,  and  as  to  the 
character  of  the  loans.  There  are  certain  loans,  as,  for  example,  real- 
estate  loans,  which  a  United  States  national  bank  is  prohibited  from 
dealing  in. 

The  Brazilian  business  man,  it  is  hoped,  will  do  what  he  can  to 
make  it  possible  for  American  banks  to  give  real  financial  assistance 
within  the  restrictions  under  which  these  banks  are  obliged  to  operate. 
The  Brazilian  business  man  can  help  in  several  ways,  particularly  in 
not  being  overexacting  with  respect  to  the  time  for  which  credit  is 
asked.  In  the  development  of  the  American  banking  system  the 
principle  has  become  fixed  that  loans  should  be  reasonably  liquid,  and 
in  the  Federal  reserve  act  the  limit  for  loans  made  by  the  Federal 
reserve  banks  has  been  placed  at  90  days  for  strictly  commercial  loans 
and  6  months  for  what  might  be  termed  loans  for  agricultural  pur- 
poses. 

Another  principle  adopted  by  the  Federal  reserve  banks  and  the 
member  banks  is  that  the  condition  of  borrowers  shall  be  made 
known  with  entire  frankness  to  the  bank.  In  the  matter  of  loans 
in  excess  of  certain  amounts,  the  borrower  in  the  United  States  is 
required  to  submit  a  statement  of  his  condition,  and  in  the  United 

98257°— 15- — 22 


338  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

States  this  custom  is  generally  complied  with.  It  is  felt  that  the 
stronger  the  financial  standing  of  a  merchant  the  less  should  be  his 
objection  to  reporting  to  his  banker  the  condition  of  his  business. 
It  can  not  be  expected  that  branches  of  American  banks  will  become 
factors  of  great  importance  or  will  be  able  to  render  valuable  assist- 
ance locally  unless  the  firms  which  desire  to  use  their  facilities  and 
to  request  accommodations  for  their  ends  are  willing  to  give  the 
information  necessary  to  permit  of  the  doing  of  business  in  a  safe 
manner.  By  freely  establishing  these  credits  American  branches 
will  facilitate  in  a  large  measure  importation  and  exportation  of 
goods  between  the  two  countries. 

TRADE  AND  COMMERCE. 

The  Brazilian  subcommittee  on  problems  of  transportation  and 
commerce  beg  to  submit  the  following  recommendations  to  the 
general  committee  on  Brazil: 

(1)  We  recommend  that  greater  prominence  be  given  in  the  public 
schools  and  other  educational  institutions  of  the  United  States  to 
the  study  of  the  Central  and  South  American  countries,  their  geo- 
graphical location,  natural  resources,  government,  and  language. 

(2)  We  recommend  that  emphasis  be  given  to  the  necessity  of 
greater  liberality  being  exercised  in  the  interpretation  of  customs 
regulations  by  the  countries  of  North  America,  and  Latin  America 
especially,  with  respect  to  the  free  entrance  or  drawback  of  duty  on 
travelers'  samples  or  other  samples  introduced  into  the  respective 
countries,  solely  for  the  purpose  of  promoting  trade. 

(3)  With  respect  to  the  necessity  of  more  effective  protection  of 
trade-marks,  we  call  attention  to  the  efforts  that  have  been  made  in 
previous  years  by  conferences  among  several  nations  to  protect  the 
inviolability  of  trade-marks  and  to  facilitate  the  granting  of  trade- 
marks, and  recommend  renewed  consideration  and  joint  agreement 
by  special  committees  from  each  country  on  this  subject. 

(4)  To  facilitate  reciprocal  business  relations  between  merchants 
and  manufacturers  of  both  nations  and  the  granting  of  such  reason- 
able credits  in  both  directions  as  may  be  safe  and  desirable,  we  recom- 
mend the  establishment  of  a  reliable  means  whereby  merchants  and 
manufacturers  of  either  nation  can  determine  with  reasonable  ac- 
curacy the  financial  responsibility  of  the  purchaser  of  the  other 
nation,  and  to  this  end  the  active  and  liberal  cooperation  of  the  bank- 
ing institutions  of  each  nation  is  invited. 

(5)  This  subcommittee  strongly  recommends  that  there  be  estab- 
lished between  the  United  States  and  Latin- American  countries  a 
system  of  direct  exchange  based  on  the  dollar  unit  of  the  United 
States  of  North  America. 

(6)  In  order  to  facilitate  the  interchange  of  products  adapted  to 
the  needs  of  American  countries  we  recommend  the  formation  of 
bureaus  of  standards  of  the  respective  countries  to  standardize,  in  so 
far  as  possible,  the  requirements  of  each  country,  and  recommend  to 
the  manufacturers  and  producers  of  the  several  countries  the  imme- 
diate recognition  of  such  standards  and  corresponding  weights  and 
measures,  and  we  urge  that  such  steps  be  taken  in  the  United  States 


GROUP   CONFERENCE   REPORTS BRAZIL.  339 

as  will  insure  the  general  adoption  by  it  of  the  metric  system  of 
weights  and  measures  within  a  reasonable  term  of  years. 

(7)  We  draw  attention  to  the  favorable  results  which  have  fol- 
lowed the  granting  by  Brazil  and  Cuba  of  preferential  duties  apply- 
ing to  certain  products  of  the  United  States  and  recommend  the  ex- 
tension of  reciprocal  tariff  concessions  between  the  Latin  American 
countries  and  the  United  States. 

(8)  We  emphasize  the  extreme  necessity  for  rapid,  frequent,  and 
dependable  marine  transportation  service  to  provide  adequately  for 
the  maintenance  and  development  of  commerce  between  the  States  of 
North  and  South  America. 

(9)  We  recommend  that  the  postal  rates  now  existing  within  the 
United  States  be  extended  to  include  the  Latin  American  countries 
and  made  reciprocal,  and  that  it  is  of  the  very  greatest  commercial 
importance  that  a  parcel-post  and  money-order  system  be  generally 
established. 

(10)  We  urge  the  extension  of  direct  telegraphic  service,  either  wire- 
less or  cable,  between  all  parts  of  North,  Central,  and  South  America, 
to  be  owned,  controlled,  and  operated  by  exclusively  American  in- 
terests. 

(11)  We  recommend  to  the  press  of  all  the  interested  countries 
that  a  more  comprehensive  and  reliable  system  for  the  exchange  of 
important  news  items  be  established. 

GENERAL   SUGGESTIONS. 

The  general  committee  also  unanimously  adopted  the  following 
recommendation : 

"  Your  committee  feels  that  permanent  results  will  flow  from  this 
great  conference  if  specific  efforts  are  made  to  carry  on  the  work  after 
the  conference  is  ended.  Success  along  this  line  can  only  come  by  a 
definite,  organized  effort  and  by  keeping  attention  focused  upon  the 
particular  problems  which  may  arise  in  connection  with  the  develop- 
ment of  commercial  relations  between  North,  Central,  and  South 
America. 

"We  feel  that  the  establishment  of  a  permanent  expert  body, 
upon  which  shall  be  represented  as  far  as  practicable  all  American 
Republics,  is  essential  to  the  growth  of  commercial  relations  between 
the  Americas.  Such  a  body  of  experts  should,  we  believe,  closely 
cooperate  with  the  Pan  American  Union ;  it  could  devote  its  energies 
to  a  study  of  trade  laws,  customs  regulations,  business  practices,  finan- 
cial and  commercial  relations,  with  the  purpose  of  developing  a 
greater  uniformity  in  laws  and  customs  and  of  furnishing  accurate 
and  reliable  information  bearing  upon  financial  and  commercial 
problems.  One  of  the  main  purposes  of  such  an  organization  would 
be  to  furnish  a  source  of  reliable  information  which  could  be  readily 
available  to  the  business  men  of  any  of  the  countries. 


340  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

"Of  most  importance  at  the  present  time  and  in  the  immediate 
future  is  the  mutual  education  of  the  business  men  of  the  Americas, 
not  only  in  regard  to  business  customs  and  trade  laws,  but  also 
concerning  the  resources  of  the  various  countries,  the  problems  in 
connection  with  their  development,  and  the  results  which  may  be 
expected  from  capital  conservatively  invested.  Information  of  this 
kind  is  particularly  necessary  in  the  United  States.  South  and 
Central  American  Republics,  which  are  at  the  present  time  looking 
to  North  America  to  furnish  capital  for  the  development  of  their 
countries,  should  be  keenly  interested  in  educating  the  investors  of 
the  United  States  as  to  the  business  possibilities  and  resources  of 
their  countries.  A  wide-spread  knowledge  of  conditions  and  an 
understanding  of  the  resources  of  countries  are  prerequisite  to  the 
successful  attraction  of  capital. 

"It  is  important  that  the  committee  or  commission  should  have 
a  responsible  permanent  head  with  expert  experience,  the  com- 
mittee itself  to  be  composed  of  experts  representing  each  of  the 
countries.  The  expert  representing  each  of  the  countries  might 
himself  very  properly  be  the  permanent  chairman  of  a  committee 
of  business  men  to  be  appointed  in  each  country  to  advise  with  the 
committee  through  their  chairman." 

The  committee  therefore  suggests  and  recommends  the  adoption 
of  the  foregoing  recommendations  by  the  Pan  American  Financial 
Conference. 

Respectfully  submitted. 

AMARO  CAVALCANTI,  Chairman. 


APPENDIX  TO  REPORT  OF  COMMITTEE  ON  BRAZIL.* 


FOREIGN  COMMERCE  OF  BRAZIL  WITH  THE  NATIONS  HERE  INDICATED, 
QUINQUENNIUM  FROM  1910  TO  1914. 

The  values  have  been  calculated  upon  foreign  coins,  taking  as  a  basis  the  in- 
ternational parity  of  112.10.0  equal  to  milreis  1.000  $000  (Brazilian  money  ac- 
count), also  that  of  francs  25.22  equal  to  a  pound  sterling,  and  still  francs  5.18 
equal  to  $1  (American  coin). 

Imports  and  exports  of  four  countries  whose  balance  shows  favorable  to  Brazil. 


Imports. 

Exports. 

Balance. 

United  States 

£ 
39,  814,  441=$191,  109,  316.  80 
2,149,466=     10,317,436.80 
3,733.686=     17,921,692.80 
24,260,276-  116,449,324.80 

£ 
115,  974,  201=$556,  676,  164.  80 
20,889,652=  100,270,329.60 
13.  243,242=     63,567,561.60 
29,695,627=  142,539,009.60 

£ 
76,  159,  760=8365,  566,  848.  00 
18,740,180=     89,952,892.80 
9,509,556=     45,645,868.80 
5,435,351=    26,089,684.80 

Netherlands 

Austria-Hungary  
France.  

Total  i... 

69.  957.  869=  335.  797,  771.  20  179,  802.  723=  863,  053,  065.  60 

109,844,854=  527,255,294.40 

i  In  favor  of  Brazil. 

What  will  explain  such  an  enormous  difference  against  the  United  States? 
In  my  opinion  this  question  has  been  already  answered  by  some  publications 
made  in  the  United  States,  wherein  facts  and  conditions  are  pointed  out  which 
state  in  a  veritable  way  the  trade  situation  at  present  existing  between  Brazil 
and  the  United  States. 

Such  facts  and  conditions  are  the  following : 

(1)  Business  people  of  North  America  have  in  general  but  a  very  confused 
idea  of  trade  and  commerce  in  Brazil. 

(2)  Even  the  great  manufacturers,  merchants,  and  exporters  have  not  yet 
endeavored  properly  and  earnestly  to  study  and  understand  the  financial  and 
business  methods  likely  to  enlarge  their  relations  with  the  customers  and  con- 
sumers they  already  have  in  Brazil,  except  in  regard  to  some  few  articles, 
the  most  important  of  which  is  flour,  which  at  present  enjoys  a  reduction  of 
30  per  cent  in  all  customhouses  in  Brazil. 

(3)  Such  ignorance  in   relation  to  the  Brazilian  trade  and  commerce   is 
mainly  due  to  lack  of  a  more  frequent  communication  of  all  kinds  between  the 
two  countries,  which  is  not  true  of  the  principal  European  countries,  which  have 
an  increasing  interest  with  the  South  American  countries  through  their  steam- 
ship lines  touching  continually  the  ports  of  Brazil. 

(4)  The  most  of  the  North  American  manufacturers,  merchants,  or  experts 
do  not  know,  in  a  reliable  manner,  what  are  the  common  or  most  prevalent 
market  prices  of  the  European  goods  that  are  imported  by  the  Brazilian  mer- 


Prcsented  by  Dr.  Amaro  Cavalcantl. 


341 


342  PAN   AMERICAN    FINANCIAL   CONFERENCE. 

chants,  in  order  to  compare  them  with  those  of  similar  goods  when  manu- 
factured in  North  America. 

(5)  They  are  ignorant,  further,  of  what  kinds  of  merchandise  are  being  manu- 
factured to-day  in  Brazil,  their  quantity  and  their  quality,  and  what  price 
similar  merchandise  can  obtain  most  commonly  in  the  international  markets. 

As  to  the  particular  advantages  to  come  from  the  increase  of  steam  navigation 
between  the  two  countries,  they  are  self-evident.  It  suffices  to  state  that  given 
the  organization  of  a  monthly  line  between  Rio  de  Janeiro  and  New  York  by 
the  Brazilian  Lloyd,  in  spite  of  its  being  composed  of  a  few  small  steamers, 
the  exports  of  North  America  to  Brazil  has  increased  in  an  extraordinary  way, 
as  one  can  see  from  the  following  figures : 

Exports  of  NortJi  America  to  Brazil. 

1910 £6,127,582.0.0  or  $29,412,393.60 

1911 7, 045,  277.  0.0  or     33,  817,  329.  60 

1912 _• 9,899,036.0.0  or     17,515,372.80 

1913 10,  553,  432. 0.0  or     50,  656,  473.  60 

1914__  6,189,114.0.0  or     29,707,747.20 


Amounting  to  a  total  of : £39,  814, 441.  0.0  or  $191, 109,  316.  80 

Leaving  out  of  account  the  year  of  1914,  it  being  an  abnormal  one,  the 
Brazilian  imports  of  North  American  goods  during  the  preceding  four  years 
show  an  increase  of  about  42  per  cent — a  progress  never  before  attained  by  any 
other  country  in  an  equal  space  of  time. 

Now,  it  seems  to  me  opportune  to  say  a  word  on  the  intelligent  way  in 
which  the  Germans  have  developed  their  trade  and  commerce  in  Brazil  during 
the  same  last  five  years : 

Imports  from  Germany. 

1910 J £7,607,898.  0.0  or  $36,516,910.40 

1911 8,  869,  911.  0.0  or    42,  575,  572.  80 

1912 10, 909, 079.  0.0  or    52,  363,  536.  00 

1913 11,  737,  398.  0.0  or     56,  339,  510.  40 

1914__  5,  719, 045.  0.0  or    27,451,416.00 


Amounting  to  a  total  of £44,  843,  331.  0.0  or  $215,  246,  945.  60 

Exports  to  Germany. 

1910 - £7,466,734.  0.0  or  $35,840,323.20 

1911 9,  702,  501.  0.0  or    45,  572, 004.  80 

1912 10,684,814.  0.0  or    51,287,107.20 

1913 9,134,240.  0.0  or    43,844,352.00 

1914__  4,  636,  318.  0.0  or    22,254,326.40 


Amounting  to  a  total  of £41,  624,  607.  0.0  or  $199,  798, 113.  60 

The  balance  in  favor  of  Germany  is  scarcely  £3,218,715,  or  $15,449,832,  while 
the  totality  of  all  values,  both  imported  and  exported,  reaches  the  total  sum  of 
£86,467,929,  or  $415,046,059.20.  Leaving  out  of  consideration  the  abnormal  year 
of  1914,  the  difference  between  the  import  value  of  £7,607,898,  or  $36,517,910.40, 
in  1910,  and  that  of  £11,737,398,  or  $56,339,510.40,  in  1913,  shows  an  increase  of 
£4,129,500,  or  $19,821,600,  or  35  per  cent. 


GROUP  CONFERENCE   REPORTS BRAZIL.  343 

As  to  the  Brazil  exports  from  1910  of  £7,466,734,  or  $35,840,823.20,  to  1913  of 
£9,134,240,  or  $43,844,352,  its  increase  lias  been  30  per  cent. 

The  comparison  of  these  figures  on  both  sides  "  Imports  and  exports  "  serves 
to  convince  one  of  the  beneficial  and  reciprocal  advantages  really  produced  by 
trade  between  Brazil  and  Germany  in  the  period  referred  to. 

It  is  such  a  kind  of  commercial  equilibrium  that  we  desire  shall  also  exist 
through  an  extensive  and  growing  intercourse  between  Brazil  and  the  United 
States.  But  this  German  situation  was  not  acquired  in  the  Brazilian  markets 
as  a  mere  matter  of  chance ;  not  at  all. 

The  Germans  have  not  attained  it  except  by  studying  thoroughly  the  eco- 
nomic conditions  of  Brazil,  by  looking  into  its  several  branches  of  trade 
activity,  by  establishing  German  banks  in  its  principal  cities,  by  maintaining 
and  increasing  between  their  country  and  Brazil  German  lines  of  steam  naviga- 
tion, by  inquiring  into  the  conditions  of  credit  to  be  opened  to  Brazilian  im- 
porters or  merchants  worthy  of  confidence,  by  examining  carefully  not  only  the 
reliable  reasons  for  good  returns  from  the  manufactures  exported  but  the 
same  on  the  products  to  be  imported  either  for  food  or  as  raw  material  for  the 
factories,  and  finally  by  lending  and  investing  German  capital  in  favor  of  com- 
mercial transactions  and  agricultural  and  industrial  enterprises  between  the 
two  countries. 

If  the  German  methods  proved  really  efficient  and  favorable  for  the  great 
development  of  trade  between  Brazil  and  Germany,  why  not  adopt  equal 
methods  between  Brazil  and  the  United  States? 

SOME    SUGGESTIONS. 

Regarding  the  subject  of  relations  in  general  between  the  North,  Central, 
and  South  American  countries,  it  seems  to  me  to  be  an  opportune  time  to  offer 
the  following  suggestions: 

(a)  It  is  necessary  to  put  an  end  once  for  all  to  the  misconception,  if  it 
exists  anywhere,  that  the  United  States,  by  promoting  the  enlargement  of 
its  relations  with  the  Central  and  South  American  Republics,  aims  but  to 
increase  a  way  of  better  patronizing  them,  pursuant  to  the  principles  of  the 
Monroe  doctrine.  As  to  Brazil,  in  particular,  such  a  misconception  never 
existed. 

Whatever  may  be  the  interpretation  freely  given  to  the  said  doctrine,  the 
truth  is  that  on  one  side  all  of  the  Republics  in  South  and  Central  America 
have  entire  self-consciousness  of  their  political  position  as  independent  nations, 
knowing  that  they  are  sovereigns  within'  their  territories,  as  the  great  North 
American  Republic  is.  On  the  other  hand,  it  is  absolutely  certain  to  each  that 
the  United  States  has  continually  demonstrated  that  it  has  no  other  feeling 
or  intention  with  reference  to  its  sister  Republics  that  those  of  mutual  progress, 
development,  and  prosperity.  The  respect  for  each  country's  right  and  priv- 
ileges has  been  always  the  continued  rule  of  its  conduct  toward  such  Re- 
publics. Therefore  there  is  no  reason  whatever  for  them  to  admit  so  mischie- 
vous an  insinuation,  obviously  disseminated  with  a  view  to  diminishing  and 
weakening  their  good  will  and  sympathy  with  the  United  States. 

(6)  It  is  likewise  necessary  to  be  settled  that  in  the  market  of  South  America 
there  is  no  exclusive  preference  toward  the  goods  imported  from  Europe.  The 
South  American  merchant  will  buy  from  the  North  American  producer  or  manu- 
facturer as  much  or  more  than  he  does  from  the  European,  provided  that  the 
former  offers  him  price,  quality,  and  other  conditions  not  inferior  to  those 
offered  by  the  latter ;  or,  as  it  already  has  been  observed,  "  it  should  not  be 


344  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

imagined  that  the  customer  at  the  other  end  has  any  respect  or  sentiment  for  the 
national  origin  of  the  goods  he  is  prepared  to  buy.  The  customer  is  the  ordi- 
nary human  being  and  struggles  to  get  the  best  value  for  his  money,  with  no 
care  whether  the  article  is  of  American  or  European  make,  so  long  as  the  price, 
quality,  and  style  are  suitable  to  him."  Such  is,  and  such  shall  ever  be  the 
predominant  rule  in  business  or  trade  affairs. 

Of  course  if  we  look  upon  the  figures  of  the  foreign  trade — I  speak  on  this 
point  with  particular  reference  to  Brazil — we  shall  find  a  somewhat  enormous 
balance  against  the  United  States  in  comparison  with  some  European  countries 
with  which  we  maintain  most  frequent  commercial  relations,  as,  for  example, 
while  Brazil  has  imported,  from  1910  to  1913,  $335,340,153  from  England  and 
$215,247,945  from  Germany,  on  the  other  hand  the  importations  during  the 
same  period  from  the  United  States  did  not  exceed  $191,109,316.  Also  if  we 
compare  the  figures  of  importation  and  exportation,  say,  between  England  or 
Germany  and  Brazil,  we  shall  still  find  a  balance  in  favor  of  the  former  of 
$101,056,756  and  $15,449,832,  respectively,  while  similar  figures  between  Brazil 
and  the  United  States  show  a  new  difference  against  the  latter  of  $365,566,848. 

But  it  is  now  to  be  observed  that  such  difference  unfavorable  to  the  United 
States  does  not  mean  in  any  way  a  lack  of  good  will  toward  this  country. 
The  fact  is  merely  due  to  some  special  circumstances,  the  principal  of  which 
may  be  briefly  stated  as  follows :  First,  the  priority  of  the  Europeans  in  South 
America,  steadily  increasing  by  the  establishment  of  commercial  houses,  banks, 
and  industrial  enterprises  of  various  kinds  in  different  parts  of  the  countries 
concerned;  and,  second,  and  above  all,  by  the  increasing  investment  of  Euro- 
pean capital  there. 

If  the  North  American  producers,  merchants,  manufacturers,  and  capitalists 
are  willing  to  act  in  the  same  way  and  to  an  equal  extent,  and  being  guided  by 
the  same  spirit,  purpose,  and  belief,  there  can  not  be  any  doubt  that  they  will 
get  a  large  field  for  business,  securing  equal  or  more  profitable  returns. 

Moreover,  there  are  yet  some  conditions  of  detail  that  the  business  men 
of  North  America  leave  out  of  consideration,  and  this  undoubtedly  to  their 
disadvantage.  Although  it  is  true  that  the  South  American  markets  have  been 
visited  in  the  last  few  years  by  North  American  travelers,  manufacturers, 
merchants,  and  capitalists,  or  their  agents,  yet  the  fact  remains  that  they  do 
not  have  enough  reliable  information  as  to  the  said  markets.  I  should  say,  re- 
garding the  goods  and  under  what  conditions  they  would  be  better  accepted  by 
the  customers  and  consumers  in  the  different  countries,  sometimes  one  deals 
with  a  question  of  the  size,  form,  color,  or  style  of  the  article,  and  even  of  its 
packing,  as  already  used  or  preferred,  which  will  decide  their  general  accept- 
ance in  the  market.  In  this  particular  no  foreign  merchant  or  manufacturer 
has  proved  better  disposed  to  any  arrangement  than  the  German  exporter,  for 
what  he  wants  is  to  get  a  market  for  his  goods,  whatever  may  be  the  conditions 
required  by  the  importers  or  consumers.  This  explains  the  high  figures  the 
German  commerce  has  reached  everywhere  in  South  America. 

(c)  The  question  of  credit  is  a  fundamental  one  for  business  relations  with 
South  American  merchants.  As  to  Brazil,  for  example,  it  is  important  to  keep 
in  mind  that  the  great  importers  in  the  markets  of  Para,  Pernambuco,  Bahia, 
Rio  de  Janeiro,  Santos,  Rio  Grande  do  Sul,  and  the  other  centers  of  Brazil, 
reputable  men  and  well  regarded  as  they  are  generally,  have  been  accustomed 
to  enjoy  all  facilities  of  credit,  purchasing,  as  a  rule,  the  goods  imported  on 
terms  of  60,  90,  120  days,  and  even  of  6  months.  It  will  be  unnecessary  to 
mention  that  the  American  exporters  do.  not  sell  their  goods  under  those  condi- 
tions, sending  their  goods  to  the  customers  only  for  advanced  payment. 


GROUP   CONFERENCE   REPORTS BRAZIL. 


345 


(d)  It  is  still  desirable  to  insist  on  the  need  of  American  steamship  com- 
panies and  American  banks  in  South  America  as  a  means  of  improving  and 
increasing  the  commercial  relations  between  the  countries  there  and  North 
America.  The  steamship  lines  are  needed  for  the  prompter  transportation 
of  people  and  goods,  and  the  banks  for  facilitating  all  the  pecuniary  transac- 
tions. 

So  far  as  concerns  Brazil,  it  can  be  asserted  that  the  two  now  existing  steam- 
ship lines,  one  Brazilian  and  the  other  English,  are  not  likely  to  meet  all  the 
requirements  of  an  increasing  movement  of  first-class  passengers  and  of  a  more 
rapid  postal  service,  as  would  be  desirable. 

With  regard  to  the  lack  of  American  banks  in  the  South  American  commer- 
cial centers,  all  we  know  is  that  last  April  two  agencies  of  the  National  City 
Bank  of  New  York,  one  in  Rio  de  Janeiro  and  the  other  in  Santos,  began  to 
operate,  but  under  such  limited  circumstances  that  as  yet  they  do  not  fulfill  the 
ends  had  in  view.  It  would  be  at  least  desirable  that  other  similar  agencies 
should  be  established  as  early  as  possible  in  the  other  principal  cities  of  the 
country. 


PARTIAL  LIST  OF  GOODS  IMPORTED  DURING  THE  LAST  FIVE  YEARS. 


Imports  from  all  coun- 
tries. 

Imports  from  the 
United  States. 

In  contos. 

In  pounds 
sterling. 

In  contos. 

In  pounds 
sterling. 

Scales 

1,840 
68.  195 
155,325 
8,462 
20,293 
4,835 
9.321 
6,820 
1,579 
2,581 
11,  124 
10,455 
1,647 

122,666 
4,546,333 
10,421,666 
564,  133 
1,352,866 
322,333 
621,333 
454,  666 
105,266 
172,066 
741,600 
697,000 
109,800 

795 

4,555 
59,720 
231 
442 
4,040 
1,260 
1,871 
230 
704 
1,904 
1,664 
186 

53,000 
303,666 
3,981,333 
15,400 
29,466 
269,333 
84,000 
124,732 
15,333 
46,933 
126,933 
110,933 
12,400 

Cement  

Flour        

Dried  fruits 

Condensed  milk  .  .  . 

Writ-frig  piap.hiriAsT    T 

Pianos" 

Timepieces 

Printing  ink 

Varnishes 

Rubber  manufactures  .  . 

Furniture  

Windmills 

Total 

302,277 
60,695 

20,231,728 
4,046,345 

77,602 
15,520 

5,173,462 
1,034,692 

Anntial  average  P-tnount-S 

NOTE.— The  rate  of  16d.  for  1SOOO,  or  1  pound  sterling,  15SOOO,  was  taken  for  the  conversion,  as  it  was  the 
exchange  rate  at  the  time  referred  to. 


346 


PAN   AMERICAN   FINANCIAL   CONFERENCE. 
Population  and  surface. 


Inhabit- 
ants. 

Square 
kilometers. 

Square 
miles. 

Density  of  population. 

Per  square 
kilometer. 

Per  square 
mile. 

Amuzonas  

500.000 
760,000 
600,000 
450.  000 
1,000,000 
430,000 
650,  000 
l,6oO.OOO 
800,000 
500,  000 
2,560,000 
430,000 
1,  250,  000 
3,200,000 
570,  000 
510,  000 
1,750,000 
4,850.000 
302,996 
300,223 
1.000,000 
195,000 

1,894,724 
1,149,512 
459,884 
301,  797 
104,250 
57,485 
74,  731 
128,395 
58,491 
39,090 
426,427 
44.839 
68,982 
290,876 
251,904 
43,  535 
236,553 
547,855 
747,311 
1,378,783 
1,116 
191,000 

731,553 
443,827 
177,561 
116,523 
40,  250 
22,  194 
28,853 
49,573 
22,583 
15,092 
164,  643 
17,312 
26,633 
112,307 
97,260 
16,808 
91,333 
211,540 
288,537 
532,348 
431 
73,  745 

0.3 
.7 
1.3 
1.5 
10.0 
8.0 
9.0 
12.9 
13.7 
12.8 
6.0 
9.6 
18.1 
11.0 
2.3 
11.7 
7.4 
8.8 
.4 
.2 
897.5 
1.0 

0.7 
1.8 
3.3 
3.8 
25.9 
20.7 
23.3 
33.4 
35.4 
33.1 
15.5 
21.8 
46.8 
28.5 
5.9 
30.3 
19.1 
22.8 
1.0 
.5 
2,319.5 
2.6 

Para    . 

Maraiihfin 

Piauhy  

Ceara" 

Tlio  Grfvnde  do  Norto 

Parahyba  

Pernambuco 

Alagoas  .         

Sergipe. 

Bahia 

Esperito  Santo  

Rio  de  Janeiro 

Sao  Paulo  

Parana  .  . 

Sant  !\  flfttharirifv 

R  'oGrande  do  Sul  

Minas  Geraes  ... 

Goyaz 

Matto  G  rosso  ....         .         

Districto  Fed 

Acre 

Total  

24,308,219 

8,497,540 

3,280,906 

According  to  the  last  census,  the  Brazilian  population  exceeds 
25,000,000  inhabitants,  evidently  too  small  for  such  a  large  territory. 


CHILE 


347 


CHILE. 


GROUP  CONFERENCE  REPORT. 


Hon.  WILLIAM  G.  McAooo,  Secretary  of  the  Treasury, 

Chairman  Pan  American  Financial  Conference. 
SIR  :  In  behalf  of  the  Chile  Group  Committee,  we  beg  to  say  that 
after  several  well-attended  conferences  and  after  full  discussion  it 
was  agreed  to  submit  the  following  report  to  the  Pan  American 
Financial  Conference: 

I. 

The  question  of  facilities  in  transportation  being  referred  to  a  spe- 
cial commission,  the  matter  of  financial  facilities  between  the  United 
States  and  the  South  American  countries  is,  in  the  opinion  of  the 
Chilean  committee,  the  next  most  important  element  in  promoting 
closer  commercial  relations.  For  this  purpose,  in  the  judgment  of 
the  committee,  it  is  desirable  to  encourage  connections  and  inter- 
course between  the  established  financial  institutions  of  the  South 
American  countries  and  those  of  the  United  States,  so  that  each  may 
avail  itself  of  the  acquired  experience  of  the  others.  Such  relations 
will  be  beneficial  in  proportion  to  their  expansion,  and  it  is  there- 
fore essential  that  the  banks  there  and  here  should  be  qualified  to 
draw  bills  of  exchange  upon  each  other  in  the  same  way  as  is  now 
done  between  Europe  and  Chile,  and  the  Chilean  committee  suggests 
that  the  Pan  American  Financial  Conference  shall  recommend  the 
adoption  in  both  countries  of  certain  necessary  legislation  tending  to 
this  end. 

II. 

With  the  same  purpose,  the  Chilean  committee  suggests  that  the 
conference  recommends  that  laws  be  enacted,  in  the  countries  where 
such  legislation  is  not  now  in  force,  to  legally  establish  bonded  ware- 
house warrants  and  receipts,  so  as  to  make  available  collateral  secu- 
rity for  the  development  of  international  commerce. 

III. 

The  Chilean  committee  suggests  that  the  conference  recommends 
the  advisability  of  permitting  the  payment  of  such  part  of  the  export 

349 


350  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

duties  on  nitrate  from  Chile  to  the  United  States  of  America,  as  are 
now  payable  in  90-day  sight  drafts  in  sterling  on  London,  may 
hereafter  be  paid  in  90-day  sight  drafts  in  dollars  on  New  York, 
at  such  rate  of  exchange  as  may  be  periodically  fixed  by  the  proper 
Chilean  authorities. 

IV. 

The  merchants  in  Chile  are  accustomed  to  credits  sufficiently  long 
to  enable  them  to  realize  upon  their  goods  and  thus  procure  funds 
with  which  to  meet  their  obligations,  while  exporters  in  the  United 
States  of  America  demand  generally  cash  payments  for  their  com- 
modities. It  is  desirable  that  such  necessary  changes  in  the  laws  of 
the  United  States  of  America  shall  be  made  as  will  enable  banks 
to  extend  their  credit,  discount,  and  rediscount  facilities,  so  as  to 
conform  to  the  trade  customs  and  necessities  of  Latin  America. 

V. 

This  committee  has  represented  to  the  committee  on  uniformity 
of  laws  its  belief  that  it  is  desirable  to  establish  a  permanent  inter- 
American  commission,  which  shall  study  commercial  problems  and 
conditions  in  the  various  countries,  and  particularly  the  customs 
laws  and  regulations  now  in  force,  and  shall  recommend  a  basis  for 
making  effective  a  uniform  classification  of  goods  for  customs  pur- 
poses and  uniformity  of  port  duties  and  regulations. 

A  memorandum  was  prepared  by  the  Chilean  members  of  the  com- 
mittee, in  response  to  the  questions  suggested  by  the  Secretary  of 
the  Treasury  of  the  United  States,  regarding  financial  and  economic 
conditions  in  Chile. 

Respectfully  submitted. 

Luis  IZQUIERDO,  Chairman. 


COLOMBIA 


351 


COLOMBIA. 


GROUP  CONFERENCE  REPORT. 


Hon.  WILLIAM  G.  McAooo,  Secretary  of  the  Treasury r, 

Chairman  Pan  American  Financial  Conference. 

SIR:  Your  committee  has  discussed  the  various  points  raised  by 
the  Secretary  of  the  Treasury  for  the  consideration  of  the  group 
committees  with  especial  reference  to  the  relations  between  Colombia 
and  the  United  States.  The  Colombian  delegates  have  submitted 
to  the  Pan  American  Financial  Conference  three  comprehensive 
pamphlets  dealing  with  the  financial  and  economic  situation  of 
Colombia  at  the  present  time,  reporting  upon  Colombia's  public 
works  and  giving  statistics  of  her  trade.  We  beg  to  suggest  that  in 
the  printed  proceedings  of  this  Conference  these  reports  be  included 
as  a  part  of  the  report  of  this  committee.* 

Our  discussions  have  developed  the  fact  that  Colombia  has  in 
the  past  depended  principally  upon  European  credit  for  financing 
her  foreign  trade.  Therefore  when  the  declaration  of  war  in  August 
last  was  followed  by  the  temporary  interruption  or  cessation  of  these 
credit  facilities,  by  the  demands  for  the  repayment  of  loans  and  by 
the  declaration  of  moratoria  in  Europe  and  in  certain  countries  of 
South  America,  although  not  in  Colombia,  there  was  not  unnatu- 
rally considerable  dislocation  of  the  ordinary  course  of  trade.  The 
financial  and  economic  situation  of  Colombia,  while  subjected  to  a 
severe  strain,  has  remained  fundamentally  sound. 

As  is  shown  by  the  statistics  included  in  the  accompanying  memo- 
randa, Colombia  has,  for  some  time  past,  exported  to  the  United 
States  products  valued  at  an  amount  nearly  twice  that  of  the  com- 
modities imported  from  this  country.  Your  committee  therefore 
feels  that  it  should  be  possible  and  is  important  more  nearly  to 
equalize  the  imports  and  exports  between  Colombia  and  the  United 
States.  Your  committee  moreover  feels  that,  in  order  to  effect  this  trade 
extension,  the  creation  of  mutual  banking  relationships,  through 
the  establishment  in  Colombia  of  branches  of  American  banks  or 

*  See  Exhibits  A,  B,  and  C  immediately  following  this  report. 
98257°— 15 23  353 


354  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

through  closer  relationships  between  the  institutions  now  existing — 
in  Colombia  and  the  United  States — is  highly  desirable.  Either 
one  or  the  other  of  these  steps  must  be  precedent  to  and  it  is  believed 
would  naturally  tend  to  the  establishment  of  "dollar  exchange," 
provided,  of  course,  a  market  therefor  could  be  created  in  Colombia 
itself.  The  creation  of  such  a  market  would  chiefly  depend  upon 
the  increase  of  American  exports  to  Colombia  and  the  consequent 
remuneration  due  from  Colombia  to  the  United  States.  Your  com- 
mittee feels,  however,  that  the  most  essential  step  toward  the  stimu- 
lation of  a  market  for  "dollar  exchange"  is  the  investment  of 
American  capital  in  Colombian  enterprises. 

Aside  from  the  mutual  advantages  to  be  derived  from  the  exten- 
sion of  the  commercial  relations  between  the  two  countries,  your 
committee  desires  to  call  the  especial  attention  of  the  Conference, 
and  particularly  of  the  American  delegates  present,  to  the  geo- 
graphical location  of  the  Republic  of  Colombia  in  its  relation  to 
the  Panama  Canal  and  the  proximity  of  the  principal  Colombian 
ports  on  the  Atlantic  and  Pacific  Oceans  to  both  entrances  of  the 
canal.  This  being  visualized  it  is  at  once  self-evident  that  the 
hostage  to  the  future  given  by  the  United  States  by  the  construc- 
tion of  the  canal  makes  it  imperative  in  the  mutual  interests  both 
of  the  United  States  and  of  Colombia  that  the  two  countries  should 
establish  relations  of  the  greatest  intimacy. 

Your  committee  moreover  believes  it  to  be  in  the  interest  of  all 
the  American  Republics,  whose  future  commerce  will  pass  through 
the  Panama  Canal,  and  especially  essential  to  the  United  States, 
that  adequate  harbor  accommodations  and  facilities  for  transship- 
ment and  storage  be  installed  at  the  Colombian  ports  of  Santa  Marta 
and  Cartagena  on  the  Atlantic  and  Buenaventura  on  the  Pacific 
Oceans.  To  assure  the  proper  development  of  these  ports  it  is  also 
felt  that  the  sanitation  systems  at  these  ports  should  be  perfected. 
Specific  Colombian  revenues  have  already  been  assigned  for  the 
improvement  of  these  harbors  and  the  sanitation  of  these  ports,  and 
plans  and  surveys  have  been  prepared  by  competent  engineers.  In 
addition,  the  especial  attention  of  the  conference  is  called  to  the 
possibilities  of  railway  constructions  which  would  stimulate  the 
development  of  the  rich,  natural  resources  of  the  country,  and  thus 
build  up  a  traffic  which  would  find  its  way  to  the  markets  of  the 
world  through  the  ports  mentioned. 

Your  committee  recognizes  the  importance  of  the  extension  of 
inter- American  steamship  transportation,  but  desires  to  make  no  spe- 
cial recommendation  in  this  regard,  feeling  that  the  interests  of 
Colombia  in  this  respect  will  best  be  assured  by  common  measures 
beneficial  to  all,  which  your  committee  understands  are  now  being 
considered  by  a  committee  especially  appointed  for  this  purpose. 


GEOUP   CONFERENCE  REPORTS COLOMBIA.  355 

Your  committee  is  familiar  with  and  indorses  recommendations 
which  will  be  presented  by  the  general  committee  appointed  to  con- 
sider the  possibility  of  securing  uniform  laws  relating  to  trade, 
commerce,  and  an  international  commercial  court. 

In  conclusion  your  committee  begs  to  report  that  from  the  stand- 
point of  Colombia  the  most  urgent  requirement  of  the  present  time 
is  capital  with  which  to  undertake  the  public  improvements  men- 
tioned above  and  to  develop  a  system  of  national  railways.  This 
requirement,  it  is  believed,  Colombia  shares  alike  with  other  coun- 
tries of  Central  and  South  America.  In  view  of  the  present  situ- 
tion  throughout  the  world's  financial  markets,  Colombia  looks  to  the 
United  States  in  the  hope  that  American  investors  may  find  it  profit- 
able to  furnish  the  funds  necessary  for  Colombian  development, 
which  development,  it  is  believed,  will  be  in  the  interest  not  only  of 
Colombia  itself  but  to  the  United  States  as  well.  With  this  object 
in  view,  your  committee  desires  to  submit  for  the  consideration  of 
the  conference  the  following  resolution : 

That  in  order  to  make  definite  and  permanent  the  work  of  this 
congress,  and  that  the  greatest  good  may  come  from  it,  we  make  the 
following  recommendations : 

1.  That  special  committees  for  each  country,  similar  to  those  which 
have  been  appointed  in  connection  with  this  conference,  be  named  by 
the  Secretary  of  the  Treasury  and  made  permanent. 

2.  That  similar  committees  be  appointed  by  the  Pan  American 
countries. 

3.  That  it  shall  be  the  duties  of  these  committees  to  cooperate  in 
the  interchange  of  information,  to  study  the  financial  and  commercial 
problems  of  the  respective  countries,  and  to  further  in  all  practical 
ways  the  extension  of  mutual  financial  and  commercial  relations, 
making  reports  from  time  to  time  with  reference  to  projects  thus 
considered. 

4.  That  such  reports  be  submitted  to  the  Secretary  of  the  Treasury 
and  to  the  Chamber  of  Commerce  of  the  United  States,  to  be  given 
such  publicity  as  may  be  deemed  advisable. 

5.  That  the  Secretary  of  the  Treasury  be  requested  to  consider  the 
establishment  of  a  general  executive  council,  consisting  of  the  chair- 
men of  the  various  committees  thus  constituted  in  the  United  States; 
this  council  to  meet  at  least  once  a  year  in  Washington  and  to  devise 
ways  and  means  of  continuing  and  enlarging  the  admirable  work 
which  has  been  begun  by  this  conference. 

6.  That  consideration  be  given  to  the  creation  of  a  board  of  en- 
gineers, to  be  approved  by  the  general  executive  council  or  by  the 
Chamber  of  Commerce  of  the  United  States,  from  which  board  the 
several  committees  may  select  experts  for  the  investigation  of  proj- 
ects to  be  offered  for  financing,  the  cost  of  such  reports  to  be  borne  by 
the  parties  presenting  the  projects. 

Respectfully  submitted. 

S.  PEREZ  TRIANA,  Chairman. 


EXHIBIT  A. 

COLOMBIA'S  PUBLIC  WORKS — AN  EXCEPTIONAL  OPPORTUNITY  FOR  IN- 
VESTMENT OF  AMERICAN  CAPITAL. 

FACTS  WHICH  SERVE  AS  A  BASIS  FOR  THE  FOUNDING  OF  A  CORPORATION 
OR  A  SYNDICATE  FOR  THE  DEVELOPMENT  OF  BUSINESS  AND  PUBLIC 
WORKS  IN  COLUMBIA. 

THE  COUNTRY. 

Colombia  is  larger  than  Germany  and  France  together ;  also  larger 
than  all  the  coast  States  from  Maine  to  Florida,  including  Ohio  and 
West  Virginia. 

Colombia  is  the  richest  and  most  powerful  neighbor  of  the  Panama 
Canal  and  has  1,600  miles  of  coast  line  along  the  Atlantic  side  and 
1,500  miles  along  the  Pacific,  with  ports  on  both  sides  which  serve 
as  shelter  for  the  vessels  of  all  nations. 

Colombia,  when  assisted  by  large  capital  well  employed,  will  be 
as  rich  as  the  richest  and  most  prosperous  country  in  Latin  America, 
due  to  her  boundless  natural  resources  at  only  six  days'  distance 
from  the  United  States. 

If  American  capital  should  go  to  Colombia  at  the  present  time 
it  would  have  the  first  opportunity  and  could  take  advantage  of  the 
greatest  and  best  classes  of  business  and  also  obtain  the  contracts 
for  the  construction  of  the  most  indispensable  public  improvements 
of  the  country,  exactly  as  the  English  did  in  the  Argentine  from 
1860  to  1880. 

PROSPECTIVE  BUSINESS. 

Certain  specific  classes  of  business  have  an  immense  and  very 
immediate  future  in  Colombia,  namely,  mining,  stock  raising,  and 
the  exploitation  of  forests. 

MINING. 

All  the  minerals  known  are  found  in  Colombia;  and  there  are 
some,  as  platinum  and  emeralds,  which  are  not  found  in  any  other 
country  in  paying  quantities  except  Eussia. 

In  the  order  of  their  importance,  the  workable  mines  are  as 
follows: 

First.  Gold,  silver,  platinum,  iron,  copper,  and  emeralds. 

Second.  Crude  oil. 

Third.  Coal. 
356 


GROUP   CONFERENCE   REPORTS COLOMBIA.  357 

Up  to  the  present  time  the  exploitation  of  the  above  mineral  prod- 
ucts has  been  made  with  small  capital,  which,  however,  has  not  pre- 
vented the  making  of  large  fortunes. 

So  far  the  number  of  known  mines  in  the  Republic  of  Colombia  is 
as  follows: 

Department  of  Antioquia 12,181 

Department  of  Narino 2, 452 

Department  of  Caldas 2,610 

Department  of  Tolima 502 

Department  of  El  Valle 641 

In  regard  to  coal,  Colombia  need  not  import  coal  for  her  own  con- 
sumption, for  it  is  to  be  had  in  every  part  of  the  Republic.  The 
exploitation  has  been  limited  to  the  needs  of  home  consumption,  but 
if  carried  out  on  a  large  scale  the  entire  needs  of  the  neighboring 
countries  could  be  supplied,  establishing  large  depots  on  both  sides 
of  the  Panama  Canal,  at  each  port  on  the  Atlantic  and  also  on  the 
Pacific  side. 

Petroleum  is  found  in  large  fields  both  in  the  interior  and  near  the 
coast,  and  surveys  made  by  individuals  and  by  foreign  syndicates 
show  that  Colombia  may  possibly  prove  to  be  a  more  productive  field 
than  Mexico. 

This  mineral  is  to-day  exploited  on  a  very  small  scale. 

STOCK   RAISING. 

Colombia  has  vast  stretches  of  natural  pasturage  in  all  climates, 
ample  for  the  feeding  of  stock  on  a  scale  sufficient  to  maintain  a  con- 
stant supply  of  cattle  on  the  hoof,  as  well  as  for  the  establishment  of 
packing  houses  in  regions  close  to  the  coast. 

Nearer  to  the  United  States  than  Argentina  and  Uruguay,  with 
her  cheap  cattle  and  grazing  lands  and  with  a  large,  substantial 
saving  in  freights,  Colombia  could  send  meat  to  the  United  States, 
as  well  as  cattle,  beating  all  competition.  From  the  Atlantic  coast 
seaports  the  distance  is  only  1,900  miles  to  New  York  and  1,400  miles 
to  New  Orleans. 

At  present  Colombia  has  only  about  7,000,000  of  bovine  cattle, 
and  yet  only  7,000  head  were  exported  last  year  to  Panama  and 
the  West  Indies.  Should  a  packing  house  be  established,  the  scope 
of  the  exports  would  be  easily  increased  50  times. 

TIMBEE. 

There  are  all  kinds  of  woods  for  fine  cabinetwork,  such  as  ma- 
hogany, cedar,  walnut,  etc.,  as  well  as  enormous  tracts  of  lands  cov- 
ered with  famous  hardwood  like  lignum-vitae,  quebracho,  diomate, 


358  PAN   AMERICAN"   FINANCIAL   CONFERENCE. 

etc. ;  also  a  rich  collection  of  trees  and  shrubs  for  the  production  of 
tannic  acid;  the  mangrove  in  particular. 

These  large  forests  are  generally  found  along  the  banks  or  near 
by  the  rivers  of  easy  navigation. 

It  is  evident,  therefore,  that  there  is  a  field  for  the  profitable  in- 
vestment of  all  the  capital  that  may  be  desired  for  the  development 
of  these  great  natural  resources  of  the  country.  From  the  lack  of 
capital  there  follows  a  lack  of  belief  in  the  country,  simply  because  it 
is  not  explored,  and  therefore  not  known. 

A  GREAT  NATION  WITHIN  COLOMBIA. 

In  the  foregoing  no  account  has  been  given  of  eastern  Colombia, 
that  is  to  say,  of  those  immense  plains  traversed  by  long,  navigable 
rivers  which  empty  into  the  Orinoco  and  the  Amazon. 

These  lands  are  as  a  rule  level  and  covered  with  natural  pasturage, 
where  abound  droves  of  cattle,  partly  domesticated  and  partly  wild, 
whose  exact  number  is  not  even  known.  It  contains  also  abundant 
quantities  of  petroleum,  which  can  be  seen  running  out  over  the  sur- 
face of  the  rivers.  It  is  rich  in  gold,  for  there  was  located  the  El 
Dorado  of  the  conquerors. 

A  large  colonization  enterprise,  obtaining  from  the  Government 
extensive  territory  and  with  such  grants  as  the  famous  English  com- 
panies possessed  in  colonizing  Africa,  could  transform  such  territory 
into  inexhaustible  storehouses  of  natural  products  and  into  marts  of 
the  grazing  and  mineral  industries.  That  region  of  the  future  has 
two  outlets — to  Europe,  by  way  of  the  Amazon  and  Orinoco  Eivers, 
and  to  the  Pacific,  by  means  of  a  railroad  easy  of  construction,  which, 
taking  advantage  of  a  depression  on  the  mountain  range,  can  reach 
the  valley  of  the  Patia  Eiver,  which  empties  into  the  Pacific,  a  two 
days'  journey  from  the  Panama  Canal. 

The  interest  of  an  American  enterprise  would  favor  the  outlet  by 
railroad  along  the  Patia. 

MEANS  TO  SUCCESS. 

In  order  that  the  dormant  riches  of  Colombia  may  be  exploited  and 
fill  with  money  the  coffers  of  those  who  will  exploit  them,  it  will  be 
necessary  to  construct  routes  of  rapid  and  cheap  communication, 
build  railroads,  channel  out  certain  rivers,  and  widen  and  improve 
maritime  ports.  This  work  is  easy  and  has  the  advantage  that,  what- 
ever road  or  route  be  started,  it  will  at  once  commence  to  pay  returns, 
as  the  regions  traversed  are  both  populated  and  industrial. 

The  greater  part  of  the  system  of  routes  of  transportation  in 
Colombia  has  for  its  center  the  Eiver  Magdalena,  which  is  for  Colom- 
bia what  the  Mississippi  is  for  the  United  States.  This  river  is  navi- 


GROUP   CONFERENCE   REPORTS COLOMBIA.  359 

gable  by  large  vessels  for  600  miles  up  from  its  mouth,  and  for 
smaller  craft  300  miles  farther.  Up  this  river  foreign  products  and 
merchandise  enter  Colombia,  and  the  greater  part  of  the  national 
products  leave  Colombia  by  the  same  river,  as  the  centers  of  con- 
sumption and  of  production  are  located  within  a  short  distance  on 
either  side  of  the  river.  So  that,  taking  the  Magdalena  Eiver  as  the 
trunk  line  of  the  future  systems,  and  channeling  the  sand  banks  at 
its  mouth,  in  order  that  steamships  may  enter  as  far  as  the  flourish- 
ing city  of  Barranquilla,  it  would  be  necessary  to  construct  or  finish 
or  enlarge  the  following  lateral  railroads : 

1.  From  Calamar  to  Cartagena. 

2.  From  Tenerife  to  Santa  Marta. 

3.  From  Tamalameque  to  Cucuta. 

4.  From  Puerto  Wilches  to  Bogota. 

5.  From  Puerto  Berrio  to  Medellin. 

6.  From  Girardot  to  Cali. 

All  of  them  should  be  feeders  of  a  main  railroad  running  parallel 
with  the  Magdalena  from  Neiva  to  Barranquilla. 

There  is  in  such  projects  work  for  some  2,300  miles  of  new  con- 
struction and  of  enlargement  of  the  constructions  already  in  existence. 

And  apart  from  the  Magdalena  system,  there  remain  to  be  con- 
structed other  routes  through  rich  mineral  and  grazing  lands,  as,  for 
example : 

7.  From  Medellin  to  Puerto  Cesar  (Uraba). 

8.  From  Medellin  to  Cali. 

9.  From  Bogota  to  the  Meta  (region  of  the  east). 

10.  From  the  Patia  toward  the  great  plains  of  the  Amazon,  or 
a  total  of  1,200  miles,  more  or  less. 

The  amount  of  American  capital  which  it  will  be  possible  to  em- 
ploy, figuring  on  the  average  rate  of  $50,000  per  mile,  will  reach 
some  $200,000,000,  and  with  the  improvements  of  the  sea  and  river 
ports  and  the  dredging  of  rivers  this  figure  may  go  up  to  $250.000,- 
000,  a  vast  and  highly  productive  investment  for  the  genius  and 
energy  of  this  Nation,  and  yet  an  amount  less  than  that  which  has 
been  invested  by  the  English  in  Argentina. 

And  it  should  not  be  forgotten  that  the  Colombian  law  authorizes 
the  Government  to  subsidize  railroad  construction  to  the  extent  of 
$10,000  per  kilometer  of  roadbed  constructed  ($16,000  per  mile), 
and  it  grants  up  to  300  hectares  of  public  lands  per  mile  of  railroad 
constructed,  to  be  located  on  either  side  of  the  same. 

The  law  grants  to  the  construction  companies  (of  railroads)  the 
privilege  of  usufruct  of  the  railroad  up  to  50  years,  after  the  expira- 
tion of  which  period  it  can  be  continued  for  25  years  more,  but  the 
Government  may  during  the  last  period  buy  the  railroad  from  the 
concessionaires. 


360  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

MODUS  OPERANDI. 

We  recommend  the  organizing  of  an  association  of  bankers,  manu- 
facturers, construction  companies,  railroad  and  mineral  industries 
which  will  decide  to  invest  a  sum  of  money  in  the  immediate  explora- 
tion of  the  country  and  in  obtaining  contracts  of  colonization,  con- 
struction, exploitation,  etc. 

This  amount  of  money,  or  common  fund,  might  be  managed  by  a 
syndicate,  to  be  represented  later  by  shares  of  stock  (paid  up)  in  the 
different  companies  which  may  be  formed. 


EXHIBIT  B. 

PUBLIC  AND  PRIVATE  FINANCIAL  AND  ECONOMIC  SITUATION  OF 

COLOMBIA. 

Before  the  outbreak  of  the  European  war  the  economic  increment 
of  Colombia  followed  a  normal  progressive  course,  and  faith  in  her 
future  growth  had  encouraged  some  European  syndicates  and  capi- 
talists to  submit  to  the  Government  different  schemes  dealing  with 
the  material  and  financial  development  of  the  nation.  As  to  banking, 
for  instance,  the  house  of  Dreyfus,  of  Paris  and  London,  submitted 
to  the  Government  two  plans  to  establish  a  central  bank  for  deposits 
and  discounts,  with  the  right  of  issuing  bank  notes,  and  with  a  capital 
of  $5,000,000;  also  a  mortgage  bank  with  a  capital  of  $5,000,000. 
The  terms  under  which  these  two  banks  were  to  start  business  were 
widely  discussed,  and  the  bankers,  after  considering  the  principal 
objections  made  to  the  original  proposal,  changed  those  terms  for 
others  more  favorable  to  the  Government.  The  projects  so  modified 
should  form  the  basis  for  the  bills  that  were  to  be  submitted  to  the 
July  sessions  of  Congress  in  1914.  But  the  European  war  put  a  stop 
to  all  these  plans. 

As  regards  public  works  the  Colombian  Government  entered  into 
contracts  with  English  corporations  for  the  survey  of  the  principal 
ports  on  the  Pacific  as  well  as  on  the  Atlantic  Ocean,  in  order  to 
methodically  enlarge  and  equip  them. 

Surveys  were  made  for  works  to  cost  a  total  of  £3,000,000  to 
£4,000,000,  and  a  contract  was  even  signed  for  works  to  cost  $3,000,000 
in  one  of  the  ports.  The  European  war,  however,  left  those  contracts 
in  abeyance. 

Encouraged  by  the  studies  of  the  subsoil  of  Colombia,  which  had 
clearly  shown  the  oil  wealth  of  the  country,  Pearsons,  the  English 
syndicate,  sent  representatives  to  Bogota  to  submit  to  the  Govern- 
ment the  exploitation  on  a  large  scale  of  the  oil  fields  that  might  be 


GROUP   CONFERENCE  REPORTS COLOMBIA.  361 

found  in  Government  lands.  The  tenders  submitted  were  carefully 
considered,  but  the  syndicate  withdrew  them  because  they  found  that 
the  press  was  strongly  opposed  to  the  contracts.  Other  American  and 
Canadian  syndicates  had  also  decided  to  work  the  extensive  oil  fields 
of  Colombia,  and  probably  they  have  followed  up  their  studies  and 
surveys. 

In  order  to  take  advantage  of  the  experience  acquired  in  other 
countries,  the  Colombian  Congress  passed  a  bill  by  which  it  was  de- 
clared that  the  subsoil  of  the  public  lands  where  oil  is  found  is  the 
property  of  the  nation  and  can  not  be  assigned  in  perpetuity  to  any 
company  or  individual  which  might  wish  to  work  the  same.  The 
future  exploitation  of  public  oil  fields  in  Government  lands  will, 
therefore,  be  acquired  by  concessions  limited  to  a  term  of,  say,  20,  30, 
or  50  years. 

Some  time  in  1913  several  European  construction  companies, 
backed  up  by  French,  English,  and  German  banks,  planned  to  submit 
to  the  Government  the  construction  of  all  the  railway  lines  in  pros- 
pect, furnishing  the  necessary  capital,  as  well  as  European  engineers 
and  the  equipment  required,  in  order  to  work  and  manage  the  lines 
until  the  time  when  the  Government  should  decide  to  buy  them,  on 
conditions  to  be  agreed  upon.  The  Balkan  War  prevented  the  syndi- 
cate from  going  ahead  with  the  plan ;  then  the  European  war  broke 
out  and  it  was  found  impossible  to  renew  it. 

It  is  then  safe  to  state  that  (1)  foreign  capital  was  ready  to  go 
into  Colombia,  as  the  country  was  found  to  be  a  promising  field,  and 
(2)  that  had  it  not  been  for  the  European  war  the  country  would  at 
present  be  in  a  way  to  speedy  progress  and  with  strong  national  and 
foreign  banking  institutions  working  under  the  laws  of  the  country. 

The  field  thus  prepared  is  the  same  which  the  force  of  circum- 
stances places  to-day  within  the  reach  of  American  capitalists,  either 
as  individuals  or  as  financial  corporations.  The  Colombian  Govern- 
ment is  ready  to  render  every  aid  to  any  reliable  corporation  that  may 
wish  to  undertake  the  economical  development  of  the  country. 

Among  the  public  works  referred  to  the  most  important  is  rail- 
way communication,  in  which  $200,000,000  could  be  easily  and  profit- 
ably invested. 

Since  1910  the  fiscal  standing  of  the  country  has  steadily  progressed 
and  the  National  Treasury  revenues  have  increased,  as  shown  by  the 
following  figures:  In  1910,  $10,983,000;  in  1911,  $11,531,000;  in  1912, 
$13,218,000;  and  in  1913,  $17,055,000;  and  the  outcome  of  the  first 
six  months  of  1914  warranted  the  belief  that  the  revenues  for  that 
year  would  reach  $19,000,000  or  perhaps  $20,000,000. 

Relying  on  the  normal  development  of  the  country  the  Govern- 
ment had  decided  on  a  plan  of  improvement  by  public  works,  to  be 


362  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

carried  out  with  the  ordinary  revenue,  and  in  consequence  laws  were 
enacted  by  Congress  providing  for  the  dredging  of  the  Magdalena 
Kiver  (law  71  of  1914) ,  for  the  encouragement  of  navigation  on  the 
Pacific  Ocean  (law  75  of  1914),  to  build  a  railway  between  the  city 
of  Cucuta  and  the  Magdalena  River  (law  89  of  1912),  besides  other 
laws  which  provide  for  school  buildings,  for  public  buildings,  and 
for  cart  roads  all  over  the  country. 

But  the  largest  resources  of  the  Government  come  from  the  custom- 
houses, which  yield  about  75  per  cent  of  the  total  yearly  revenues. 
Customs  duties  are  only  charged  on  foreign  merchandise  and  com- 
modities, since  the  export  tax  on  the  two  or  three  Colombian  products 
liable  to  duty  is  so  small  that  it  can  not  be  taken  into  account. 

When  the  European  war  broke  out  trade  with  Germany  practically 
came  to  an  end,  and  commerce  with  England  and  France  was  greatly 
limited;  consequently  the  national  revenues  decreased  and  have  con- 
tinued to  do  so,  to  the  point  that  the  Government  felt  compelled  to 
pass  two  decrees  in  order  to  cut  down  expenses.  These  decrees  were : 
October  20,  1914,  for  $2,257,000  for  the  year  1914,  and  February  6, 
1915,  for  $3,575,000  for  the  year  1915. 

This  way  of  meeting  the  deficit  was  considered  more  practical  and 
found  to  be  more  advantageous  than  the  use  of  credit  by  loans  in 
order  to  fill  up  the  deficiency,  notwithstanding  it  would  have  been 
comparatively  easy  to  obtain  loans  to  meet  the  usual  expenses  of 
administration. 

FOREIGN  DEBT. 

The  foreign  debt  of  Colombia  for  loans  as  well  as  for  subventions 
and  guaranties  of  interest  on  railways,  which  is  insignificant,  is  to  be 
paid  in  London  and  is  made  up  of  the  following  items : 

Three  per  cent  consolidated  debt £2, 174,  600 

Sabana  Railway  5  per  cent  loan 289,  400 

1911  6  per  cent  loan 292, 400 

Six  per  cent  Girardot  Railway  bonds  to  cancel  several 
debentures 1, 167, 132 


Total £3,  923,  720 

or  $19,618,600,  which  is  an  average  of  $3.60  per  capita,  certainly  one 
of  the  lowest  in  American  countries.  Should  Colombia  ever  decide 
to  use  her  credit  in  order  to  obtain  loans  for  public  works  or  to  en- 
courage immigration  or  to  build  schools,  she  would  have  her  credit 
as  a  considerable  asset  to  draw  upon  without  having  to  make  use  of 
her  vitality.  A  proportion  of  $25  per  capita  on  5,500,000  inhabitants 
would  allow  Colombia  to  have  a  public  debt  of  $140,000,000,  which 
she  could  easily  take  care  of.  As  it  is,  Colombia's  debt  is  onlv 
$20,000,000. 


GROUP  CONFERENCE  REPORTS — COLOMBIA.         363 
MONEY  IN  CIRCULATION,  AND  CURRENCY. 

Law  69  of  1909  gave  the  control  of  currency  in  Colombia  to  a  board 
made  up  of  three  independent  persons,  called  Junta  de  Conversion  or 
converting  board.  This  board  is  in  charge  of  the  circulating  cur- 
rency, as  well  as  of  the  change  of  damaged  bank  notes  or  paper 
money.  Its  paramount  duty  is  to  collect  a  conversion  fund  in  gold 
coin  with  which  to  guarantee  the  paper  money  in  circulation.  This 
fund  of  guarantee  is  made  up  of  an  additional  2  per  cent  on  all  cus- 
toms duties,  of  the  produce  of  the  emerald  mines,  which  are  the 
property  of  the  nation,  and  of  sundry  other  subsidiary  resources. 

The  money  in  circulation  in  Colombia  is  estimated  to  be  $24,000,000 
to  $25,000,000,  which  amounts  to  $4.30  to  $4.60  per  capita,  a  very 
small  proportion,  indeed,  and  which  will  naturally  increase  when 
Colombia  succeeds  in  turning  into  coin  the  entire  national  produc- 
tion of  her  gold  mines,  rather  small  at  present,  since  it  is  only 
$5,000,000  yearly,  but  which  will  necessarily  increase  tenfold  or  more 
when  the  mineral  resources  of  the  country  are  properly  worked, 
which  can  not  be  done  at  present  on  account  of  lack  of  communi- 
cation. 

The  amount  of  money  in  circulation  in  Colombia  is  made  up  of 
the  following  items: 

Paper  money  (value  in  gold) $10,056,300 

Silver  coin  0.900  fine 4,  004,  700 

Nickel 997,700 

Colombian  gold  coin 85,  000 

English  and  American  gold -coin "6,356,300 


$21,500.000 

It  is  estimated  that  there  are  also  in  old  silver  coins, 
Colombian  and  foreign,  in  the  frontier  Departments.      3, 000,  000 


Total $24,  500,  000 

The  gold  coin  now  on  deposit  to  guarantee  the  paper 
money  in  circulation  amounts  to $2,  586, 400 

There  is  also  a  stock  of  emeralds  now  in  Europe  be- 
longing to  the  Government  which,  turned  into  cash, 
would  add 2,  663,  600 


Total,  approximate $5,  250,  000 

which  is  about  50  per  cent  of  the  gold  value  of  the  paper  money. 

The  converting  board  has  entered  into  a  contract  with  the  Ameri- 
can Bank  Note  Co.  by  which  the  latter  is  to  engrave  notes  repre- 
sentative of  gold  coin  of  the  value  of  $1,  $2,  $5,  and  $10.  These 
notes  are  to  be  given  in  exchange  for  all  now  in  circulation  which 
are  not  uniform  in  size,  color,  etc. 


364  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

MONETARY  TJNIT. 

The  monetary  unit  in  Colombia  is  the  gold  dollar,  equivalent  to 
exactly  one-fifth  of  £1.  It  weighs  1  gram  597T%  milligrams,  and  is 
sterling  fine.  The  multiples  of  the  gold  dollar  are  one-half  condor, 
which  equals  £1  or  $5 ;  the  condor,  which  equals  £2  or  $10 ;  and  the 
double  condor,  which  equals  £4  or  $20. 

The  silver  coins  are  0.900  fine,  and  are  coined  in  fifty,  twenty,  and 
ten  cent  pieces. 

The  nickel  coins  represent  a  value  of  one,  two,  and  five  cents. 

The  English  pound  sterling  has  a  legal  circulation  as  if  it  were 
national  currency. 

BANKING. 

The  banks  doing  business  in  Bogota,  the  capital  of  Colombia,  have 
a  total  capital  of  $4,350,000,  sufficient  some  years  ago  but  inadequate 
at  present,  in  view  of  the  increase  of  business.  These  banks  are 
careful  to  excess  in  the  management  of  their  business;  so  much  so 
that  at  the  end  of  1914  some  of  them  had  in  cash  and  liquid  assets 
in  their  vaults  and  abroad  sufficient  means  to  exchange  63  per  cent 
(Banco  de  Bogota)  and  80  per  cent  (Banco  Hipotecario)  of  their 
deposits  and  current  accounts. 

The  profits  in  the  last  six  months  of  1914  in  relation  to  the 
capital  of  the  banks  were: 

Banco  de  Colombia,  TJ  per  cent  in  six  months. 

Banco  de  Bogota,  13  per  cent  in  six  months. 

Banco  Hipotecario,  12  per  cent  in  six  months  on  $500,000  paid  up. 

Banco  Central,  3J  per  cent  in  six  months. 

The  law  does  not  allow  banking  institutions  to  issue  notes,  and  the 
Government  has  the  exclusive  right  of  granting  this  concession  to  one 
or  more  banks,  according  to  the  security  offered  by  them;  but  this 
right  has  not  yet  been  granted. 

In  the  proposal  submitted  by  Dreyfus  to  the  Colombian  Govern- 
ment in  1913  for  establishing  a  central  bank  with  a  capital  of 
$5,000,000,  it  was  stipulated  that  the  bank  may  issue  notes  as  cur- 
rency to  an  amount  three  times  its  capital.  Should  a  proposition  of 
that  sort  be  ever  agreed  upon,  there  is  no  doubt  that  the  Government 
would  grant  that  most  important  privilege. 

Lack  of  time  has  prevented  the  Colombian  delegates  from  obtain- 
ing data  from  banks  in  other  towns  of  Colombia.  The  data  regard- 
ing the  banks  at  Bogota  on  December  31, 1914,  are  as  follows: 


GROUP   CONFERENCE  REPORTS COLOMBIA.  365 

BANCO  DE  COLOMBIA. 

Capital $780,000 

Reserve  fund $32, 750 

Deposits  and  current  accounts,  gold  and  paper  money 

reduced  to  gold $2,638,000     . 

Profits  in  1914  (six  months) $55,670 

Cash  on  hand  for  balance  of  current  account  if  de- 
manded  per  cent 52 

Mortgage  certificates $442,  000 

BANCO  DE  BOGOTA. 

Capital $250,  000 

Reserve  fund $100, 000 

Deposits  and  current  accounts,  gold  and  paper  money 

reduced  to  gold $1,520,018 

Profits  in  1914  (six  months) $32,500 

Cash  on  hand  for  balance  of  current  account  if  de- 
manded  per  cent—  63 

Mortgage  certificates None. 

BANCO  CENTRAL. 

Capital $2,  300,000 

Reserve  fund $343,  000 

Deposits  and  current  accounts,  gold  and  paper  money 
reduced  to  gold $706,000 

Profits  in  1914  (six  months) $79,  600 

Cash  on  hand  for  balance  of  current  account  if  de- 
manded   

Mortgage  certificates $1,  040, 000 

BANCO    HIPOTECABIO. 

Capital *  $1,  000,  000 

Reserve  fund $49, 100 

Deposits  and  current  accounts,  gold  and  paper  money 

reduced  to  gold $393,600 

Profits  in  1914  (six  months) $60,200 

Cash  on  hand  for  balance  of  current"  account  if  de- 
manded  per  cent 80 

Mortgage  certificates $943, 000 

PRIVATE   ENTERPRISES. 

The  condition  of  private  enterprises  and  of  trade  in  general  before 
the  outbreak  of  the  European  war  was  very  satisfactory  and  was 
only  the  natural  result  of  business  transactions  of  the  year  1913 
which  left  to  trade  a  large  balance  to  its  credit. 

In  1913  the  export  item,  $34,315,800,  was  larger  than  the  import 
item,  $28,535,800,  by  $5,780,000,  so  that  the  liabilities  assumed  in  the 
first  six  months  of  1914  were  based  not  on  credit  alone,  and  for  this 

*  Of  this  item  $500,000  has  been  paid  up. 


366  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

reason  when  the  war  broke  out  and  the  consequent  general  restriction 
of  business  came,  it  was  not  found  necessary  to  grant  a  moratorium 
either  in  favor  of  the  banks  or  of  private  business  men,  and  the 
condition  of  unstable  equilibrium  readjusted  itself  with  no  other 
resource  except  economy  in  expenses  and  skillful  management  of 
capital. 

The  banks  thought  it  advisable  not  to  press  from  their  clients  the 
immediate  payment  of  their  standing  loans,  but  adopted  a  wise 
policy  of  waiting,  which  made  the  settlement  of  their  debts  com- 
paratively easy. 

Conditions  were  so  favorable  and  so  clear  at  the  beginning  of  1914 
that  certain  enterprises,  as  for  instance  the  Electric  Energy  Co. 
(light  and  power) ,  the  cotton  mills,  and  some  of  the  sugar-cane  fac- 
tories in  different  sections  of  the  country  decided  to  enlarge  their 
plants,  and  a  powerful  syndicate  of  capitalists  in  Bogota  planned  to 
start  anew  a  foundry  and  iron  works  which  had  not  been  worked  for 
years,  and  to  turn  it  into  an  up-to-date  plant  where  steel  rails,  etc., 
could  be  made,  in  order  to  begin  building  railways,  bridges,  and  all 
sorts  of  structural  steel  works  in  the  interior  of  the  country,  with 
material  manufactured  in  the  country. 

But  as  a  natural  consequence  of  the  outbreak  of  war,  the  help 
offered  by  the  European  money  market  to  the  impulse  of  commerce 
and  trade  was  withdrawn. 

There  is  in  Colombia  a  wide  and  safe  field  in  which  American 
enterprises  can  work  and  invest  their  capital  if  they  only  take 
advantage  of  the  friendly  attitude  that  existed  in  1914.  If  up  to  the 
present  the  Colombian  people  have  shown  themselves  somewhat  re- 
luctant in  trying  to  obtain  the  help  mentioned,  it  is  due  only  to  the 
fact  that  the  pending  treaty  between  Colombia  and  the  United  States 
has  not  yet  been  ratified  by  the  United  States  so  that  Colombia  could 
open  the  country  to  the  activity  of  American  enterprises,  in  the  most 
friendly  spirit,  as  she  earnestly  wishes  to  do. 

But  outside  of  private  undertakings  there  is  still  a  great  deal  to  be 
done  in  Colombia  to  supply  the  needs  of  municipalities,  such  as  light- 
ing plants,  slaughterhouses,  public  markets,  tramways,  etc.  Should 
the  needed  capital  be  available,  perhaps  it  would  be  possible  to  obtain 
from  the  municipalities  as  a  guaranty  of  the  money  invested,  the 
management  or  administration  of  the  work  done  during  the  time  until 
the  capital  and  interest  is  paid  back. 

The  possibility  of  the  United  States  getting  a  considerable  pro- 
portion of  the  part  taken  by  the  European  markets  in  regard  to  the 
economic  activity  of  Colombia  has  for  a  basis  a  double  feature : 

1.  The  capacity  of  the  United  States  to  consume  a  larger  porpor- 
tion  of  the  produce  of  Colombia  than  they  are  drawing  at  present. 


GROUP   CONFERENCE  REPORTS COLOMBIA.  367 

2.  The  capacity  of  Colombia  to  consume  American  products  so  far 
not  known  in  Colombian  markets,  and  new  articles  and  products  for 
new  industries. 

As  to  the  first,  it  is  up  to  the  American  importers  to  find  a  market 
for  their  surplus  of  merchandise,  and  since  it  is  a  matter  of  such  great 
concern  it  is  expected  that  they  are  already  doing  so. 

Eegarding  the  second  point,  Colombia  is  already  trying,  with  some 
success,  American  products  for  those  usually  drawn  from  European 
countries.  For  instance,  the  exports  from  New  York  for  the  first 
four  months  of  1915  are  30  per  cent  larger  than  those  of  the  corre- 
sponding period  of  1914,  $2,470,000  against  $1,943,000. 

But  there  are  new  lines  for  the  development  of  American  com- 
merce, the  scope  of  which  can  not  be  measured,  but  may  safely  be 
stated  as  enormous.  Mining  (gold,  coal,  oil,  copper),  the  establish- 
ment of  packing  houses  near  the  coast,  and  especially  the  building  of 
railways  and  dredging  of  rivers  are  the  most  immediate  items  for 
investment.  In  fact,  Americans  have  just  now  in  Colombia  the  same 
opportunities  that  the  English  had  and  so  cleverly  took  advantage  of 
in  Argentine  from  1860  to  1880,  and  which  made  them  the  leading 
factor  in  that  country's  progress. 

It  is  now  the  time  for  loans  and  financing  to  come  into  play,  as  the 
most  effective  instruments  to  secure  trade  and  business. 

Public  loans  to  the  Government  and  municipalities,  large  financing 
facilities  to  private  enterprises  or  to  merchants  and  planters,  together 
with  a  system  of  banking  branches  or  real  banks  with  American  and 
native  capital  are  the  right  moves  to  begin  with. 

American  commercial  and  financial  interests  must  be  put  in  direct 
contact  with  the  requirements  of  Colombia  if  the  mutual  commerce 
is  to  be  turned  toward  the  United  States,  making  the  city  of  New 
York  the  exchange  market  for  both  countries. 

Also,  banking  agencies  in  Colombia  may  take  for  them  the  financ- 
ing of  seasonable  crops  as  it  is  done  by  European  houses.  The  coffee 
planter,  for  instance,  has  to  spend  money  in  salaries,  working  ex- 
penses, transportation  of  products,  etc.,  before  he  gathers  his  crops, 
and  in  order  to  be  able  to  accomplish  all  this  he  is  to-day  accustomed 
to  draw  on  European  firms,  to  whom  he  later  consigns  his  coffee. 

TRANSPORTATION. 

It  is  obvious  that  all  efforts  in  the  way  of  developing  and  extend- 
ing trade  and  business  between  the  United  States  and  Colombia 
require  for  their  final  success  facilities  for  transportation  as  rapid 
and  cheap  as  possible. 

In  fact,  before  the  outbreak  of  the  European  war  four  principal 
periodical  lines  of  steamships  plied  between  Colombia  and  the 


368  PAN  AMERICAN   FINANCIAL  CONFERENCE. 

United  States,  so  that  the  former  country  had  means  sufficient  for  the 
interchange  of  her  trade.  Besides  rivalry  between  the  different 
lines — which,  by  the  way,  flew  flags  of  different  nationalities — gave 
the  exporters  the  opportunity  of  sending  their  products  at  reason- 
able freight  rates.  The  space  available  in  these  steamers  was  suffi- 
cient for  the  former  Colombian  trade,  and  the  steamship  companies 
had  ample  time  in  which  to  increase  their  fleets  when  required.  It 
is  absolutely  necessary,  however,  for  the  development  of  commerce 
that  the  freights  be  considerably  lowered,  since  they  absorb  a  large 
part  of  the  profits. 

The  lines  of  steamers  doing  the  trade  service  between  Colombia 
and  the  United  States  before  the  European  war  broke  out  were :  The 
United  Fruit  Co.,  weekly  sailings,  American;  Hamburg  American 
Line,  weekly  sailings,  German;  Royal  Mail  Steam  Packet  Co.,  fort- 
nightly sailings,  British ;  Panama  Eailroad  Co.  steamers,  weekly  sail- 
ings, American — in  all  about  15  steamers  each  month. 

The  principal  object  of  the  data  in  general  furnished  in  this  brief 
report  is  to  impress  the  minds  of  financiers  and  bankers  meeting  in 
this  conference  with  the  idea  that  although  Colombia  as  a  field  of 
investment  is  undoubtedly  small  at  present,  it  is  safe  and  firm,  and 
just  now  is  especially  susceptible  of  a  large  development,  particu- 
larly in  view  of  the  fact  that  the  Colombian  markets  are  at  a  distance 
of  only  1,900  miles  from  New  York  and  1,400  miles  from  New 
Orleans. 


EXHIBIT  C. 

COLOMBIA'S  TRADE  IN  1913. 

[From  official  documents.] 

Colombia  sold  to  foreign  countries $34,  315,  800 

And  bought  from  them 28,  535,  800 


Balance  on  her  side 5, 780, 000 

This  means  that  she  was  not  indebted  to  foreign  countries  as  a 
result  of  her  commerce  in  1913,  and  it  explains  why  she  did  not  con- 
sider necessary,  as  other  nations  did,  to  protect  her  citizens  by  means 
of  a  moratorium  in  the  present  critical  emergencies. 

The  main  features  of  the  adjoining  tables  are: 

IN  EXPORTS. 

Colombia  sends  to  United  States  55  per  cent  of  her  products. 
Colombia  sends  to  Great  Britain  16  per  cent  of  her  products. 
Colombia  sends  to  Germany  9J  per  cent  of  her  products. 


GROUP   CONFERENCE   REPORTS COLOMBIA. 


369 


IN    IMPORTS. 

Colombia  takes  from  United  States  26f  p|r  cent  of  her  imports. 
Colombia  takes  from  Great  Britain  20  per  cent  of  her  imports. 
Colombia  takes  from  Germany  14  per  cent  of  her  imports. 

IN  REGARD  TO  THE  UNITED  STATES. 

The  United  States  buys  from  Colombia  $18,861,800. 

The  United  States  sells  to  Colombia  $7,629,000. 

It  is  particularly  in  textiles  where  the  United  States  is  far  behind 
Great  Britain  and  France,  in  agricultural  machinery  behind  Great 
Britain,  and  in  paper  and  cardboard  behind  Germany. 

1913.    Imports  into  Colombia  from  foreign  countries. 


United 

States. 

Great 
Britain. 

Germany. 

France. 

Bel- 
gium. 

Italy. 

Other 
countries. 

Total. 

Textiles    

$1,520,100 

$3,447,700 

$582,  700 

$3,234,900 

$144,700 

$534,100 

$1,991,000 

$11,455,200 

Foodstuffs  .  .  . 

1,474,100 

83,800 

706,100 

82,100 

54,900 

30,300 

386,  100 

2,817  400 

Metals 

1,119,000 

1,055,600 

751,100 

125,300 

48  100 

15  800 

48,800 

3  163  700 

Cars,  carriages,  etc 
Materials  for  arts. 
Drugs  and  chem- 
icals   

756,300 
601,600 

424,200 

165,400 
148,200 

102,800 

139,  700 
3,700 

178,600 

21,300 
20,200 

148,  300 

80,600 
19,400 

29,800 

100 
23,000 

4,900 

700 
87,700 

58,600 

1,164,100 
904,300 

947,200 

Fuel  and  lighting. 
Agricultural  and 
mining  imple- 
ments   
Electrical   sup- 
plies 

305,600 

193,400 
147,000 

79,900 

268,400 
34,500 

47,300 

19,000 
121,800 

12,100 

3,900 
6,800 

15,600 

1,000 
2,000 

1,400 

100 
7,300 

61,600 

18,100 
900 

523,500 

503,900 
320  300 

Paper  and  card- 
board   

115,300 

36,100 

212,500 

57,400 

24,200 

26,100 

84,000 

555,600 

Wines,    liquors, 
and  drinks  
Anns  and  muni- 
tions 

86,000 
38,000 

139,200 
7,000 

121,900 
522,700 

362,500 
8,100 

21,100 
9,700 

37,200 
100 

283,500 
20  000 

1,051,400 
605  600 

Sundries 

848  900 

268  800 

605  000 

325  200 

47  900 

45  700 

833  700 

2  975  200 

Total  

7,629,500 

5,837,400 

4,012,100 

4,408,600 

499,000 

726,100 

3,874,700 

26,987,400 

Postal  parcels $1, 548, 400 

Total  imports '. 28,535,800 

1913.    Exports  from  Colombia  to  foreign  countries. 


United 
States. 

Great 
Britain. 

Germany. 

France. 

Belgium. 

Other 
countries. 

Total. 

Live  animals 

$2,400 

$700 

$200 

$82  500 

$85  800 

Animal  products  
Mineral  products  ... 

1,543,500 
3,  442,  800 

334,200 
1,569,500 

382,500 
91,200 

$52,900 
393,000 

$580,000 

469,  600 
18,100 

3,  362',  700 
5,514  600 

Vegetable  products  .  .  . 
Manufactures  

12,903,500 
800,600 

3,428,400 
97,800 

2,706,200 
29,800 

342,500 
4,600 

13,700 

4,581,000 
84,300 

23,975,300 
1,017,100 

Sundries  ......  .  . 

9,000 

2,500 

6,300 

1,200 

29,  700 

48  700 

Bullion 

160,000 

132,  900 

3  700 

3  500 

300  100 

Total 

18,861,800 

5,  566,  000 

3,216,200 

797,  900 

593,  700 

5,  268,  700 

34  304,300 

Gold  coin  by  parcel  post. . . 
Total  exports 


$11,500 
34,315,800 


98257°—  IU 


COSTA  RICA 


371 


COSTA  RICA. 


GROUP  CONFERENCE  REPORT. 


Hon.  WILLIAM  G.  McAooo,  Secretary  of  the  Treasury, 

Chairman  Pan  American  Financial  Conference. 
SIR  :  We  respectfully  beg  to  submit  the  following  report : 

SECTION  I. — PUBLIC  FINANCE. 

The  population  of  Costa  Eica  is  400,000. 

The  total  debt  is  $17,000,000,  of  which  about  $8,000,000  is  English 
credit,  $7,000,000  is  French  credit,  and  $2,000,000  scattered. 

As  a  result  of  the  European  war  the  custom  revenues  for  the 
first  three  months  of  1915  resulting  from  imports  decreased  about 
60  per  cent.  The  income  from  all  sources  for  the  first  three  months 
of  1915  totaled  1,589,630  colones,  equal  to  $794,815,  as  against  an 
income  for  1914  for  the  same  period  of  2,441,402  colones,  equal  to 
$1,220,701.  There  resulted  a  situation  which  gave  rise  to  a  lack  of 
exchange  on  the  United  States,  thereby  causing  a  paralysis  in  the 
transactions  of  the  markets  of  the  country  and  tending  further  to 
reduce  Government  revenues,  against  which  there  is  now  proposed 
legislation  tending  toward  the  imposition  of  a  permanent  direct  tax 
on  land  and  incomes. 

The  delegates  from  Costa  Eica  have  in  mind  a  plan  to  borrow 
$500,000  in  gold  in  New  York,  to  be  guaranteed  by  the  Government, 
for  the  purpose  of  tiding  over  the  present  difficult  situation  in  the 
exchange  market.  The  normal  rate  of  exchange  on  New  York  is 
115  per  cent,  whereas  by  reason  of  the  present  situation  it  has  gone 
as  high  as  185  per  cent  (the  meaning  of  this  quoted  rate  of  exchange 
is  that  at  the  high  rate  it  takes  2.85  colones  to  buy  $1,  whereas  in 
normal  times  only  2.15  colones) .  The  credit  so  secured  in  New  York 
would  be  utilized  by  the  Government  selling  drafts  to  the  local 
merchants  in  Costa  Eica  for  the  purpose  of  purchases  in  the  United 
States  at  a  fixed  rate  of  exchange,  and  the  proceeds  thereby  obtained 
in  local  currency  would  be  deposited  in  Costa  Eica  with  the  repre- 
sentative of  the  American  bank  making  the  loan,  so  that  in  addition 

373 


374  PAN  AMERICAN   FINANCIAL  CONFERENCE. 

to  the  guarantee  of  the  Government  there  would  be  an  actual  deposit 
of  the  cash  in  local  currency. 

When  the  coffee  crop  of  Costa  Rica  begins  to  come  forward  next 
November  the  balance  of  trade  will  be  readjusted  and  from  the  pro- 
ceeds of  such  crop  the  Costa  Rican  Government  will  be  able  to  re- 
place the  exchange  at  a  normal  rate,  and  will  cover  the  loan  in  New 
York.  The  total  operation  would  take  a  maximum  of  twelve  months. 

SECTION  II. — MONETARY  SITUATION. 

The  monetary  situation  of  the  country  is  normally  satisfactory, 
as  it  is  on  a  gold  standard,  and  the  only  difficulty  that  has  arisen  has 
been  caused  by  the  temporary  disarrangement  resulting  from  the 
European  war.  As  a  consequence  the  Government  was  forced  to  sus- 
pend the  law  of  paper  conversion,  which  law  stipulated  that  the 
bank-note  issues  of  the  country  must  be  redeemed  in  gold.  It  was 
impossible  to  maintain  the  operation  of  this  law  for  the  reason  that 
the  country  would  have  been  depleted  of  gold  if  the  law  had  not 
been  suspended,  and  the  banks  would  have  been  jeopardized. 

SECTION  III. — THE  PRESENT  BANKING  SITUATION. 

There  are  three  banks  in  the  country  which  are  entirely  satisfac- 
tory and  adequate  for  mercantile  operations.  In  addition  to  these 
three  banks  since  the  war,  as  a  temporary  measure  to  cover  the  deficit 
of  revenues  and  assist  their  merchants  and  farmers  over  the  crisis, 
the  Government  has  established  the  Banco  Internacional,  with  a 
restricted  issue  of  bank  notes  to  the  extent  of  4,000,000  colones, 
secured  by  a  new  issue  of  2,000,000  colones,  6  per  cent  interior  bonds 
in  conjunction  with  2,000,000  colones,  exterior  refunding  bonds  of 
face  value  of  £332,000,  now  in  escrow  in  a  New  York  bank. 

SECTION  IV. — THE  FINANCING  OF  PUBLIC  IMPROVEMENTS. 

There  is  no  comment  on  the  matter  of  financing  public  improve- 
ments, as  these  have  been  well  taken  care  of  locally. 

SECTION  V. — THE  FINANCING  OF  PRIVATE  ETERPRISES. 

The  delegates  from  Costa  Bica  stated  that  the  Pacific  Railroad  is 
owned  by  the  Government  and  is  in  satisfactory  condition.  The 
Atlantic  railroads  are  owned  by  English  and  American  capital. 

In  regard  to  public-service  corporations,  they  are  representative 
of  London  capital  invested  there,  and  of  municipal  and  local  owner- 
ship. 

The  most  urgent  need  of  the  merchants  in  Costa  Rica  is  that  of 
adequate  credit  facilities.  The  transactions  with  the  European 


GEOUP  CONFERENCE   REPORTS COSTA  RICA.  375 

markets  have  been  on  longer  terms  and  more  favorable  rates  of 
interest  than  those  usually  obtained  in  the  transactions  with  the 
United  States,  but  it  is  hoped  that  by  reason  of  the  facilities  now 
accorded  by  the  Federal  Reserve  Act  to  the  national  banks  of  the 
United  States  to  give  their  acceptance  to  long-sight  drafts  arising 
from  exports  and  imports  that  a  means  is  at  hand  for  providing 
the  merchants  of  Costa  Rica  with  facilities  which  will  be  comparable 
to  those  they  have  enjoyed  with  the  European  countries.  If  our 
banks  will  form  intimate  connections  with  the  bankers  of  Costa 
Rica  and  cooperate  in  the  opening  of  commercial  credits  to  the 
local  merchants  for  their  imports  and  exports,  it  is  felt  that  much 
will  be  accomplished  in  furthering  our  trade. 

We  understand  that  the  Chamber  of  Commerce  of  Costa  Rica  is 
in  a  position  to  furnish  credit  ratings  of  the  merchants  in  that 
country  and  would  be  glad  to  cooperate  with  the  Chamber  of  Com- 
merce of  the  United  States  and  mercantile  agencies  to  the  end  that 
this  information  be  published  in  a  rating  book  available  to  mer- 
chants and  manufacturers  in  the  United  States. 

We  therefore  offer  to  the  conference  the  suggestion  that  similar 
information  reliably  given  and  available  in  one  book  covering  all 
South  and  Central  American  countries  would  immeasurably  expedite 
export  transactions  from  the  United  States. 

The  financing  of  seasonable  crops  of  the  country  would  come  under 
the  same  operation  as  the  financing  of  the  needs  of  merchants. 

SECTION  VI. — THE  EXTENSION  OF  INTER- AMERICAN  MARKETS. 

(a)  Long-term  credits  is  an  essential  to  the  extension  of  American 
trade  in  Costa  Rica,  following  the  European  custom  of  giving  credits 
of  from  six  months  to  a  year.    It  is  urged  upon  both  the  American 
and  Costa  Rican  bankers  to  cooperate  to  the  fullest  extent  in  the 
granting  of  commercial  credits,  based  on  American   acceptances, 
which  would  be  discountable  by  the  Federal  reserve  bank. 

(b)  The  subject  of  acceptances  and  discounts  as  a  means  of  ex- 
tending inter- American  trade  has  already  been  covered. 

(c)  Direct  exchange  exists  with  the  United  States  and  shipments 
to  and  from  the  United  States  with  Costa  Rica  are  not  financed 
through  Europe. 

(d)  American  manufacturers  should  be  careful  to  adapt  their 
goods  and  packing  to  the  tastes  and  needs  of  the  Costa  Rican  con- 
sumer in  order  to  compete  with  the  European  shippers  who  have 
gone  into  this  matter  most  scientifically.     The  information  as  to 
these  details  is  obtainable  through  the  Department  of  Commerce  of 
the  United  States. 

(e)  There  are  no  preferential  tariffs,  and  trade  with  the  United 
States  is  on  an  equality  with  that  of  the  rest  of  the  world. 


376  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

SECTION  VII. — MERCHANT  MARINE  AND  IMPROVED  TRANSPORTATION 

FACILITIES. 

(a)  There  are  ample  shipping  facilities  for  ocean  traffic  and  ex- 
cellent passenger  service. 

(b)  Money-order  and  parcel-post  facilities  exist  through  conven- 
tions with  the  United  States. 

(c)  The  committee  is  advised  that  the  Costa  Rican  Government 
contemplates  legislation  legalizing  liens  to  secure  the  repayment  of 
advances  to  planters,  thereby  strengthening  credits  extended  through 
local  banks  and  merchants  for  the  planting  and  gathering  of  the 
crops;  a  like  plan  is  proposed  for  the  financing  of  cattle  and  other 
live-stock  industries. 

(d)  The   Government  has  legislated   for   the   establishment  of 
bonded  warehouses  and  public  stores  and  for  the  issuing  of  Govern- 
ment warrants  against  the  commodities  warehoused.     This  plan  is 
similar  to  the  one  which  now  prevails  in  Argentina. 

(e)  The  greatest  facility  is  given  by  the  customs  regulations  to  the 
importers  in  case  of  delay  in  the  receipt  of  shipping  documents.    In 
the  event  of  controversies  arising  from  imports,  the  matter  is  sub- 
mitted to  the  administrator  of  customs  with  appeal  to  the  minister 
of  finance,  or  finally  to  the  civil  courts.     The  committee  is  of  the 
opinion  that  controversies  arising  between  foreign  shippers  and  Costa 
Rican  merchants  should  be  submitted  to  arbitration  of  a  joint  com- 
mittee of  chambers  of  commerce,  and  that  this  method  would  be  more 
useful,  practical,  and  expeditious  than  a  general  reform  of  the  laws. 

In  cases  where  the  Costa  Rican  importer  does  not  receive  the  cor- 
responding bill  of  lading  for  his  shipment,  he  is  not  permitted  to 
obtain  possession  of  the  goods,  whether  consigned  direct  or  to  order, 
except  by  depositing  at  the  customhouse  either  an  ample  guarantee 
or  actual  cash  to  the  value  of  the  shipment.  This  provision  is  an 
excellent  protection  to  the  foreign  shipper,  and  an  instance  was 
related  by  the  Costa  Rican  delegates  of  a  case  in  which  the  consignee 
fraudulently  came  into  possession  of  the  goods  in  spite  of  the  above- 
stated  provision,  and  the  minister  of  finance,  for  the  Government, 
made  good  the  amount  of  the  invoice  to  the  local  agent  of  the  foreign 
shipper. 

Foreign  patents  and  trade-marks  are  well  protected. 

It  is  the  consensus  of  opinion  of  the  committee  that  this  Pan 
American  Conference  is  most  timely  and  of  the  greatest  importance 
to  all  the  countries  of  America,  and  that  the  interchange  of  views 
looking  toward  mutual  help  and  reciprocal  interest  will  result  in 
practical  and  lasting  benefits  to  all  concerned.  For  the  conception 
of  this  conference  and  its  success  we  are  greatly  indebted  to  the 
Secretary  of  the  Treasury,  the  Hon.  William  G.  McAdoo. 

Respectfully  submitted, 

MARIANO  GTJARDIA  CARAZO,  Chairman. 


CUBA 


377 


CUBA. 

GROUP  CONFERENCE  REPORT. 


Hon.  WILLIAM  G.  McADOO,  Secretary  of  the  Treasury, 

Chairman  Pan  American  Financial  Conference. 

SIR:  The  relations  of  Cuba  with  the  United  States  have  been  so 
close  since  the  recognition  of  Cuban  independence  by  the  treaty  of 
Paris  in  1899  that  the  further  steps  required  to  bind  the  two  coun- 
tries more  closely  together  may  be  defined  perhaps  with  greater 
precision  and  detail  than  the  relations  of  the  United  States  with 
other  countries.  The  reciprocity  treaty  of  1903  between  the  United 
States  and  Cuba  recognized  that  if  the  trade  of  the  two  countries 
with  one  another  was  to  prosper,  mutual  concessions  should  be  ac- 
corded to  certain  products  of  each  in  the  markets  of  the  other. 

So  clearly  has  it  been  recognized  that  these  special  relations 
existed  between  Cuba  and  the  United  States  that  many  measures 
are  already  in  force  for  promoting  intimate  commercial  and  finan- 
cial relations  which  in  the  case  of  other  countries  are  only  in  the 
preliminary  stage.  From  the  beginning  the  national  loans  of  Cuba 
were  taken  by  American  bankers  and  are  still  held  largely  in  the 
United  States.  The  means  of  transportation  and  other  public  util- 
ities have  also  been  to  a  large  extent  established  and  are  now  oper- 
ated by  American  capital.  The  United  States  has  come  to  be  a  pur- 
chaser of  more  than  80.2  per  cent  of  the  products  exported  from 
Cuba  and  has  increased  her  proportion  in  importations  into  Cuba 
to  52.8  per  cent. 

United  States  currency  was  early  introduced  as  official  money  by 
the  Government  of  Cuba  and  is  employed  in  commerce  as  a  supple- 
ment to  the  gold  money  of  Spain  and  France.  It  has  been  the  proud 
boast  of  the  business  community  that  these  gold  currencies  have  been 
constituted  the  standard  of  contract  obligations  even  during  the  most 
trying  experiences  in  the  economic  and  political  life  of  the  Republic. 
The  recent  adoption  by  Cuba  of  a  monetary  system  based  upon  the 
gold  dollar  of  the  United  States  and  the  prompt  adoption  of  the 
new  national  money  as  the  standard  of  operations  on  the  produce 
exchanges,  on  the  Stock  Exchange  of  Habana,  in  the  quotations  for 
sugar,  and  in  the  revised  railway  tariffs  constitute  a  recognition  of 

379 


380  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

the  primacy  of  the  money  market  of  the  United  States  in  American 
financial  affairs  which  can  not  fail  to  simplify  and  amplify  the  finan- 
cial and  commercial  relations  of  both  countries. 

In  the  issue  of  national  loans  to  Cuba,  American  bankers  have  been 
content  with  putting  the  proceeds  entirely  at  the  command  of  the 
Cuban  Government  and  have  made  no  effort  to  enforce  the  principle 
that  such  loans  should  be  employed  in  the  purchase  of  American 
products,  as  has  been  so  often  done  by  foreign  bankers  in  making 
loans  abroad.  Nor,  except  through  the  influence  of  the  normal  course 
of  exchange,  has  the  effort  been  made  to  enforce  the  principle  that 
"  Trade  follows  the  loan." 

With  so  much  progress  already  made  in  the  direction  of  close 
and  reciprocal  commercial  relations  it  is  necessary  only  for  the 
American  delegates  to  second  cordially  any  measures  which  will 
remove  further  obstacles  to  the  unfettered  movement  of  commerce 
by  modification  of  the  tariff,  by  the  revision  of  reciprocity  treaties, 
by  uniformity  of  customs  regulations,  by  the  simplification  of  the 
system  of  the  parcel  post  and  international  money  orders,  and  by 
any  other  measures  which  are  not  in  conflict  with  the  interests  of 
the  United  States  nor  with  her  other  international  obligations. 

It  is  the  belief  of  the  American  delegates  that  cooperative  effort 
by  the  two  Governments  and  by  the  merchants  and  bankers  of  the 
two  countries  to  remove  further  obstacles  to  trade  will  afford  a 
wider  market  for  American  products  in  Cuba  and  bring  more  nearly 
to  a  level  the  present  excess  of  American  imports  of  Cuban  products 
over  the  exportation  of  American  products  to  Cuba.  The  merchants 
of  the  United  States  should  be  capable,  with  proper  adaptation  of 
their  products  to  the  Cuban  market,  of  increasing  their  sales  of  sugar- 
mill  and  agricultural  machinery,  of  hardware,  textiles,  boots  and 
shoes,  food  products,  and  many  other  articles.  To  accomplish  these 
ends  it  is  recognized  that  American  merchants  should  study  more 
carefully  than  heretofore  the  requirements  of  the  Cuban  market, 
should  adapt  their  styles  to  Cuban  climatic  conditions  and  tastes, 
and  should  employ  only  competent  men  of  high  character  and  famil- 
iar with  the  Spanish  language  as  their  representatives  in  Cuba. 

For  the  purpose  of  carrying  out  these  general  ideas  the  American 
members  of  the  Cuba  Group  Conference  have  agreed  upon  the  fol- 
lowing resolutions,  and  the  recommendations  therein  contained  are 
unanimously  approved  by  all  the  members  of  the  conference  group. 

1.    TRADE  RELATIONS. 

(a)  The  Cuban  delegates  have  specifically  brought  to  the  atten- 
tion of  the  conference  the  very  high  duties  imposed  upon  Cuban 
tobacco  which  hinder  the  development  of  that  important  trade  with 


GROUP  CONFERENCE  REPORTS CUBA.  381 

the  United  States.    The  American  delegates  recommend  the  careful 
and  immediate  study  of  this  situation. 

(b)  The  trade  between  Cuba  and  the  United  States  owes  much  to 
the  beneficial  effect  of  the  reciprocity  treaty  existing  between  the 
two  countries.  The  delegates  from  Cuba  have  brought  to  the 
attention  of  the  conference  the  grave  situation  produced  by  the 
abolition  of  duties  on  imports  of  sugar  into  the  United  States  and 
the  disappearance  of  preferential  treatment  of  some  other  leading 
staples,  and  they  suggest  the  extension  of  the  principle  of  reciprocity 
to  other  commodities  entering  into  the  trade  of  the  two  countries. 
Without  submitting  any  definite  recommendation  on  this  subject, 
we  are,  nevertheless,  of  the  opinion  that  the  representations  of  the 
Cuban  delegates  are  of  such  merit  as  to  entitle  them  to  special  and 
further  consideration  in  connection  with  any  movement  to  improve 
trade  relations  between  the  countries  participating  in  the  confer- 
ence by  means  of  tariff  revisions  or  commercial  treaties. 

2.  TRANSPORTATION. 

Communication  with  Central  and  South  America  is  Cuba's  chief 
unfulfilled  need  in  the  field  of  transportation  facilities.  It  is  urgently 
recommended  that  careful  consideration  be  given  to  this  need  in  con- 
nection with  any  measures  taken  or  provisions  made  for  the  estab- 
lishment of  regular  and  improved  transportation  between  the  United 
States  and  Central  and  South  America  by  making  the  ports  of  Cuba 
regular  ports  of  call  for  ships  plying  in  the  trade  between  the  two 
continents. 

3.    PARCEL  POST. 

We  are  strongly  in  accord  with  the  recommendation  of  the  Post- 
master General  of  the  United  States  that  the  parcel-post  facilities 
should  be  enlarged.  The  obstacle  to  such  arrangement  with  Cuba 
lies  largely  in  the  provision  of  the  United  States  tariff,  which  re- 
stricts the  use  of  the  parcel  post  to  a  minimum  of  3,000  cigars  or 
cigarettes,  and  virtually  nullifies  the  use  of  the  parcel  post  for  Cuba. 
On  the  other  hand,  the  absence  of  a  parcel-post  treaty  prevents 
Cubans  from  buying  a  great  number  of  articles  which  they  could  get 
from  the  United  States  and  which  they  now  get  from  France  and 
Germany  under  parcel-post  treaties  with  these  countries. 

4.    INCREASE   OF    CUBAN   TRADE   WITH    THE   UNITED   STATES. 

The  attention  of  American  merchants  and  manufacturers  should 
be  specifically  directed  to  the  large  volume  of  merchandise  imports 
into  Cuba  from  countries  other  than  the  United  States,  amounting 


382  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

in  the  fiscal  year  1913  to  more  than  $60,000,000  in  value.  It  is  believed 
that  a  careful  study  of  the  requirements  of  the  Cuban  people,  includ- 
ing the  necessary  system  of  credits  to  be  employed  in  developing 
the  business,  would  lead  to  a  great  increase  in  the  amount  of  exports 
from  the  United  States. 

5.  LESS  RESTRICTED  CREDITS. 

We  are  of  the  opinion  that  one  of  the  causes  why  trade  between 
the  United  States  and  Cuba  has  not  been  more  developed  is  that 
normal  commercial  credits — that  is,  credits  adjusted  to  the  condi- 
tions and  need  of  the  Cuban  trade,  especially  with  regard  to  length 
of  time,  are  not  given  by  the  merchants  of  the  United  States.  ITI 
this  respect  the  situation  of  Cuba  is  identical  with  that  of  South 
and  Central  American  countries.  We  therefore  recommend  that  this 
matter  be  presented  to  the  leading  commercial  bodies  of  the  United 
States,  to  the  end  that  it  may  be  carefully  studied,  with  the  object  that 
less  restricted  credits  be  granted,  especially  in  view  of  the  fact  that 
trade  statistics  with  those  countries  show  that  unusually  small  losses 
have  resulted  from  such  practice. 

6.    PROPER  COMMERCIAL  REPRESENTATION. 

American  merchants  as  a  mle  are  at  a  great  disadvantage  in  their 
commercial  relations  with  Cuba  and  other  Spanish- American  coun- 
tries, caused  by  lack  of  knowledge  of  the  language,  laws,  and  cus- 
toms of  the  country  on  the  part  of  their  representatives. 

Special  attention  should  be  given  to  the  subject  of  preparedness 
on  the  part  of  agents  or  representatives  of  American  business  houses 
and  financial  institutions  in  order  to  facilitate  the  handling  of  com- 
mercial transactions. 

7.    SAMPLES  AND  STANDARDS. 

In  order  to  cultivate  a  more  thorough  knowledge  of  commercial 
requirements,  it  is  recommended  that  there  be  cordial  cooperation  of 
the  diplomatic  and  consular  officers  of  both  countries  in  maintain- 
ing samples,  standards,  and  statistical  data  showing  the  character  of 
the  demand  in  each  country  for  the  products  of  the  other. 

8.    COMMERCIAL  INFORMATION. 

The  attention  of  the  Departments  of  State  and  Commerce  of  the 
United  States  is  invited  to  the  great  service  that  could  be  rendered 
the  trade  with  Spanish- American  countries  if  ready  reference  man- 
uals were  prepared  by  these  departments  in  cooperation  and  con- 


GBOUP  CONFERENCE  EEPOETS CUBA.  383 

sultation  with  the  Pan  American  Union  and  with  representatives  of 
the  United  States  Chamber  of  Commerce,  containing  in  popular, 
easily  usable  form  information  regarding  the  commercial,  financial, 
and  banking  laws  of  the  several  countries. 

9.    UNIFORMITY  OF  COMMERCIAL  LAWS. 

We  cordially  commend  and  approve  the  plan  outlined  by  the  Sec- 
retary of  the  Treasury  of  the  United  States  for  the  creation  of  a 
permanent  joint  high  commission  to  recommend  to  the  countries 
represented  in  this  conference  uniform  laws  on  bills  of  exchange, 
checks,  warehouse  receipts,  and  other  commercial  instruments,  and 
the  establishment  of  an  international  tribunal  or  other  agency  of 
adequate  scope  to  promote  and  secure  the  uniform  application  and 
interpretation  of  such  laws. 

10.  COMMERCIAL  ARBITRATION. 

We  favor  the  appointment  of  arbitration  committees  formed  by 
business  men  to  settle  difficulties  and  disputes  that  may  arise  in  com- 
mercial transactions  between  the  citizens  of  the  several  countries. 

On  motion,  duly  seconded,  it  was  unanimously 

Resolved,  That  this  committee  can  not  close  its  labors  without  an 
earnest  expression  of  its  high  appreciation  of  the  f  arseeing  and  pa- 
triotic action  of  the  Hon.  William  G.  McAdoo,  Secretary  of  the 
Treasury,  in  calling  into  being  this  Pan  American  Conference,  and 
of  the  zeal  with  which  he  has  fostered  and  aided  its  deliberations, 
and  to  add  their  conviction  that  its  results  will  be  commensurate 
with  the  desires  and  expectations  of  the  citizens  of  both  Americas 
for  a  genuine  and  far-reaching  union  of  their  respective  interests 
and  aspirations. 

Respectfully  submitted. 

PABLO  DESVERNINE  y  GALDOS,  Chairman. 


APPENDIX. 

MEMORANDUM  SUBMITTED  BY  THE  CUBAN  DELEGATION. 

The  Cuban  delegation  to  the  Pan  American  Financial  Conference 
has  prepared  the  following  report,  which  treats  in  a  very  summary 
manner  of  the  different  matters  brought  to  its  attention  by  the  hon- 
orable Secretary  of  the  Treasury  of  the  United  States. 

We  wish  to  remark  at  the  beginning  that  the  commercial  and 
financial  relations  between  the  United  States  and  Cuba  are  of  such 
importance  and  magnitude,  and  so  very  close,  that  Cuba  is  not  in 
such  great  need  of  bringing  about  great  changes  in  its  intercourse 
with  the  United  States  in  the  same  measure,  at  least,  as  the  other 
countries  of  America,  but  mutual  cooperation  will  always,  of  course, 
contribute  to  help  the  trade  between  both  countries. 

To  give  an  idea  of  the  importance  which  our  trade  relations  with 
the  United  States  have  already  reached  we  have  only  to  point  out 
the  fact  that  very  nearly  90  per  cent  of  the  total  exports  of  Cuba  are 
now  brought  to  the  United  States,  while  approximately  63  per  cent 
of  the  total  imports  of  Cuba  come  from  the  United  States. 

This,  obviously,  is  due  in  a  great  measure  to  the  beneficial  opera- 
tion of  the  reciprocity  treaty  entered  into  between  the  two  countries 
in  the  year  1903,  as  may  be  seen  by  the  statistics  showing  the  increase 
in  the  reciprocal  trade  relations  since  the  treaty  was  put  into  effect 
The  fundamental  feature  of  this  treaty  is  the  mutual  concession 
which  both  nations  have  made  to  each  other  in  their  respective  tariffs, 
on  a  plan,  however,  in  which  Cuba  gives  to  the  United  States  more 
concessions,  in  matters  of  reduction  of  customs  rates,  than  the  United 
States  has  actually  made  to  Cuba  by  that  treaty.  If  as  a  result  of 
the  present  tariff  law  of  the  United  States,  all  sugars  are  admitted 
free  of  duty  to  this  country,  Cuba  will  not  then  hold  a  preferential 
position  in  regard  to  other  sugar-producing  countries,  and  the  treaty 
will  cease  to  benefit  Cuba  unless  some  other  agreement  is  enacted 
which  will  make  up  for  the  loss  of  that  preference,  the  only  substan- 
tial one  that  the  treaty  provides  for  Cuba. 

After  these  preliminary  remarks,  and  coming  to  the  specific  ques- 
tions suggested  by  the  honorable  Secretary  of  the  Treasury  for  the 
consideration  of  the  group  committees,  we  beg  to  submit  the  follow- 
ing suggestions,  which,  of  course,  have  to  be  made  in  a  very  cursory 
384 


GROUP   CONFERENCE   REPORTS CUBA.  385 

manner  because  of  the  short  time  that  we  have  had  at  our  disposal 
since  we  were  specifically  informed  of  the  questions  to  be  considered 
in  the  conference  and  the  early  date  at  which  our  report  must  be  sub- 
mitted. 

Public  revenues  have  certainly  been  affected  in  Cuba  by  recent 
events  in  Europe,  but  the  situation  could  not  have  been  otherwise, 
since  even  before  the  war  causes  had  already  begun  to  work  against 
the  trade  of  Cuba.  The  principal  of  these  causes  was  the  low  prices 
received  for  sugar  during  the  years  1912,  1913,  and  1914,  which 
diminished  the  purchasing  power  of  Cuba  and  operated  in  causing 
a  decrease  in  the  imports  and  accordingly  a  proportionate  shortage  of 
our  public  revenues.  The  breaking  out  of  the  war  would  have  had  a 
truly  disastrous  effect  on  our  trade  with  foreign  countries  but  for 
the  fact  that  the  absence  of  the  competitive  sugars  of  Germany, 
France,  Russia,  and  other  European  countries  in  the  world's  market 
has  advanced  the  prices  of  Cuban  sugars  to  a  considerable  degree 
in  comparison  with  those  of  the  two  previous  years;  and  this,  of 
course,  has  in  some  measure  made  up  for  our  losses  in  other  branches 
of  trade  which  have  been  brought  about  by  the  European  conflict. 
Our  crop  of  sugar  may  reach  this  year  perhaps  2,560,000  long  tons, 
and  at  present  quotations  would  naturally  bring  in  the  neighborhood 
of  225  millions  of  dollars.  This  sum  will  contribute  a  good  deal 
to  restore  the  purchasing  power  of  Cuba  and  to  strengthen  the 
public  revenues,  which  will  be  affected,  however,  by  the  losses  that 
Cuban  trade  will  have  to  suffer  in  other  branches,  such  as  tobacco, 
lumber,  etc.,  on  account  of  the  terrible  events  in  Europe,  where  a 
large  proportion  of  these  products  is  marketed. 

As  Cuba  depends  for  the  largest  portion  of  her  expenditures  on  the 
receipts  obtained  through  the  customs,  these  public  revenues  must 
have  been  affected  by  the  war,  although  there  seems  to  be  reason  to 
expect  that  the  shortage  in  the  receipts  will  not  be  so  large  as  may 
appear  on  paper,  because,  notwithstanding  the  appropriations  al- 
lowed in  the  budget,  the  expenditures  have  been  checked  wherever  it 
has  been  found  possible  to  do  so  by  introducing  economies  in  the  ex- 
penses for  the  running  of  the  Government. 

Moreover,  other  measures  have  been  adopted  by  the  Government 
to  meet  this  situation,  and  among  others,  those  of  the  law  of  October 
29,  1914,  known  as  the  law  of  economical  defense,  which  authorized 
the  issue  of  Treasury  bonds  up  to  $5,000,000,  with  interest  at  6  per 
cent  per  annum,  and  payable  in  three  annual  installments.  These 
bonds  may  be  given  in  payment  of  all  obligations  contracted  by  the 
State. 

At  the  outbreak  of  the  war  there  was  in  Cuba  a  moment  of  fright 
and  alarm,  for  fear  that  money  would  be  so  scarce  as  to  prevent  the 
98257°— 15 25 


386  PAN  AMERICAN   FINANCIAL   CONFERENCE. 

movement  and  sale  of  the  crops,  but  the  fact  is  that  notwithstanding 
the  cancellation  of  foreign  credits  by  European  bankers  the  condi- 
tions in  Cuba  were  not  seriously  affected,  not  only  because  that  with- 
drawal occurred  at  a  time  when  bank  credits  are  not  generally  used 
by  local  banking  institutions,  but  because  credits  were  also  extended 
by  New  York  banks  during  the  fall.  These  extensions,  which  were 
made  in  a  much  more  liberal  manner  than  had  been  done  before, 
helped  us  in  a  measure,  and,  if  continued,  will  mean  an  increase  of 
international  cooperation  between  the  United  States  and  Cuba  in 
the  future. 

As  to  the  monetary  situation,  we  have  to  say  that  before  the  out- 
break of  the  war  in  Europe  the  value  of  Spanish  silver  had  been 
rising  in  relation  to  Spanish  and  French  gold  and  American  cur- 
rency. The  current  medium  used  in  the  retail  trade  in  Cuba,  or  at 
least  in  the  largest  portion  of  the  country,  has  been  Spanish  silver, 
which  is  also  used  for  the  payment  of  labor  in  industrial  and  agri- 
cultural concerns,  with  the  exception  of  cigar  makers  and  perhaps 
other  exceptional  branches  of  labor.  This  rise  of  price  in  Spanish 
silver  became  more  acute  after  the  war  took  place,  and  even  Spanish 
and  French  gold  began  to  get  very  scarce  because  it  was  very  difficult 
for  our  banks  to  obtain  French  gold,  which,  as  is  well  known,  was 
at  that  time  legal  money  in  Cuba,  together  with  Spanish  gold,  which 
had  become  scarce  before  French  gold.  This,  of  course,  resulted  in 
the  advance  in  price  of  both  French  and  Spanish  gold,  which  cir- 
cumstances moved  our  Congress  to  pass  a  law  coining  gold  and  silver 
money  to  circulate  as  legal  money  in  the  Republic.  Up  to  a  short 
time  before  we  sailed  from  Habana  to  attend  this  conference  only  a 
small  amount  of  Cuban  gold  had  been  put  in  circulation  and  about 
double  that  amount  in  silver  had  arrived  in  Cuba.  As  is  well  known, 
all  this  money  will  have  been  coined  in  the  United  States  Mint  at 
Philadelphia,  and  it  is  generally  considered  that  the  introduction  of 
this  new  Cuban  money  will  contribute  considerably  to  settle  the 
monetary  situation,  as  only  the  new  coined  money,  together  with 
American  money,  is  declared  the  legal  money  of  the  country.  Our 
system  of  money  is  based  on  the  gold  standard,  because  if  it  is  true 
that  silver  has  been  also  coined  on  a  parity  with  gold,  it  is  no  less  a 
fact  that,  according  to  the  law,  only  8  per  cent  can  be  paid  in  silver  in 
payments  of  amounts  exceeding  $10,  and  for  sums  up  to  $10  the  pay- 
ments can  be  all  in  silver. 

It  is  not  possible  for  us  to  express  a  conclusive  opinion  as  to  the 
uniformity  of  the  monetary  standard  for  all  the  countries  of  America 
represented  at  this  conference,  but  we  are  able  to  report  that,  so 
far  as  Cuba  is  concerned,  she  has  taken  a  forward  step  in  adopt- 
ing a  system  of  coinage  founded  on  a  parity  with  the  American 
gold  dollar  of  the  United  States,  and,  besides,  this  new  monetary 


GROUP  CONFERENCE  REPORTS — CUBA.  387 

law  declares  United  States  money  legal  tender  in  Cuba.  Therefore 
we  have  placed  ourselves  on  the  same  basis  as  this  country  so  far  as 
the  monetary  unit  is  concerned,  because  we  have  the  same  system  of 
gold  money,  and  legal  money  of  the  United  States  is  expressly 
declared  by  law  to  be  legal  money  in  Cuba. 

As  a  consequence  of  this  new  law,  provisions  have  been  made  in 
our  country  to  have  all  prices  quoted  in  the  new  monetary  unit  which, 
as  before  stated,  has  as  its  basis  the  United  States  unit.  The  Ilabana 
and  several  of  the  other  exchanges  in  Cuba  have  decided  to  make 
their  quotations  in  this  new  unit,  including  the  prices  of  sugar,  which 
up  to  this  present  time  have  been  quoted  by  the  old  Spanish  system 
based  on  another  unit,  the  real,  the  value  of  which  was  12J  cents. 
There  is,  of  course,  no  doubt  that  the  effect  of  having  the  quotations 
in  this  new  unit  of  the  dollar  and  in  terms  of  dollar  exchange  will 
facilitate  the  financial  transactions  between  the  United  States  and 
Cuba.  Prices,  therefore,  will  now  be  better  understood  by  the 
people  of  both  countries  than  before,  when  recourse  had  to  be  had 
to  figuring  and  calculations  in  order  to  find  the  equivalents  of  the 
money  of  each,  and  accordingly  it  is  certain  that  the  new  step 
taken  by  Cuba  in  regard  to  this  matter  will  bring  about  closer  rela- 
tions between  the  two  peoples  and  will  work  to  the  advantage  of  the 
commerce  and  trade  of  both. 

As  to  the  conditions  existing  prior  and  subsequent  to  the  outbreak 
of  the  European  war,  there  has  certainly  been  a  change  which  has 
made  American  banking  facilities  more  available  to  Cuban  business. 
Prior  to  the  beginning  of  the  European  war  a  large  part  of  the 
banking  relations  between  Cuba  and  the  United  States  was  made 
through  banks  of  Cuba  with  Europe  (London,  Paris,  and  Hamburg) , 
from  which  blank  credits  were  obtained  and  used  in  Cuba  for  the 
movement  of  the  crops  and  for  monetary  advances  made  to  the 
planters.  It  has  been  estimated  that  these  credits  varied  from  8  to  10 
million  dollars,  which  from  the  month  of  January  onward,  when 
sugar  is  already  on  hand,  the  European  banks  doubled  against  this 
sugar  so  that  at  times  as  much  as  $20,000,000  of  sugar  value  were 
held  in  the  island  under  these  bank  acceptances.  Money  also  has 
been  advanced  on  securities  as  collateral  which  securities  are  quoted 
in  the  Habana  stock  exchange  market  and  taken  at  75  per  cent  of 
their  market  value,  and  loans  against  sugars  are  generally  made  by 
stating  in  the  draft  that  they  are  secured  by  so  many  bags  of  325 
pounds  of  sugar,  with  a  guaranty  of  a  trustee's  certificate. 

The  breaking  out  of  the  war  in  Europe  has  changed  this  condi- 
tion of  affairs  now,  inasmuch  as  the  European  can  not  afford  to 
advance  money  or  to  grant  any  credit,  and  Cuba  has  applied  to 
United  States  banks  for  her  credit.  The  United  States  banks  have 


388  PAN  AMERICAN   FINANCIAL  CONFEBENCE. 

now  facilitated  the  granting  of  those  credits  to  Cuba  by  means  of 
loans  secured  by  sugars  deposited  in  first-class  warehouses  or 
against  shipments  of  sugars  to  the  United  States.  There  is  no  doubt 
that  a  great  increase  in  the  business  between  the  United  States  and 
Cuba  can  be  obtained  when  once  the  American  bankers  are  con- 
vinced of  the  safety  and  security  of  this  method  of  extending  their 
credit. 

The  establishment  of  branch  banks  would  contribute  a  good  deal 
to  that  end  by  permitting  the  officers  of  these  branch  banks  to  be- 
come acquainted  with  the  conditions  of  the  country,  and  their  re- 
ports to  their  head  offices  would  merit  the  utmost  confidence  and 
respect,  since  they  would  come  from  persons  well  known  to  the  home 
offices. 

As  to  the  underwriting  of  national,  provincial,  and  municipal 
loans,  it  is  known  that  our  national  or  Government  loans  have  been 
contracted  by  American  firms,  and  there  is  no  reason  why  a  good 
many  of  our  loans  should  not  be  looked  upon  with  favor  here  in  the 
United  States,  for  Cuba,  as  well  for  the  national  as  for  the  provincial 
and  municipal  loans,  can  certainly  offer  all  the  guaranty  neces- 
sary to  make  them  completely  reliable.  Cuba  has  never  defaulted 
on  any  of  her  loans,  and  her  securities  are  rated  as  very  good  invest- 
ments; this  assertion  is  proved  by  the  prices  which  they  bring  in 
the  different  financial  centers  of  the  world. 

There  is  no  doubt  that  some  plan  should  be  considered  to  give  a 
completely  satisfactory  status  for  collateral  as  security  for  com- 
modity loans,  and  it  is  certainly  in  response  to  these  needs  that  the 
matter  of  organizing  the  warehouse-warrant  system  on  the  basis  of 
Government  inspection  and  supervision  is  being  attended  to  now 
by  our  Congress,  which  will  certainly  arrive  at  some  satisfactory 
solution  of  that  very  interesting  matter. 

One  of  the  questions  submitted  by  the  Honorable  Secretary  of  the 
Treasury  for  the  consideration  of  the  group  committees  is  that  con- 
cerning the  possibilities  of  securing  greater  uniformity  in  the  laws 
relating  to  commerce,  and  it  is  certainly  a  very  interesting  question, 
for  nothing  works  so  much  as  an  obstacle  to  the  trade  between  two 
countries  as  the  difference  in  their  trade  and  commerce  laws,  or  at 
least  the  absence  of  knowledge  of  the  provisions  of  those  laws.  When 
a  country  has  laws  similar  to  those  of  another  State  in  the  matter 
of  trade  and  commerce,  or  when  the  knowledge  of  the  laws  of  two 
countries  has  been  properly  diffused  among  the  commercial  and  trade 
classes  of  those  countries,  a  great  impulse  is  thereby  given  to  the  pro- 
motion of  trade  between  them,  and  whatever  might  be  done  to  secure 
as  much  uniformity  as  may  be  possible  in  matters  concerning,  for 
instance,  laws  in  relation  to  corporations,  common  carriers,  bills  and 


GfcOITP  CONFERENCE  REPORTS — CUBA.  $89 

notes,  and  other  mercantile  legal  subjects,  would  certainly  result  in 
making  even  closer  the  relation  of  trade  between  those  countries. 
The  only  difficulty  in  connection  with  the  matter  is  that  in  order  to 
obtain  positive  results  in  that  direction  many  conferences  and  inter- 
changes of  views  are  needed,  so  as  to  prepare  a  plan  for  a  basis  of  uni- 
formity on  which  the  legislatures  of  the  countries  concerned  might 
take  proper  action.  In  commercial  matters  there  is  already  a  good 
deal  of  similarity  in  the  principles  governing  those  relations,  and  it 
may  not  be  very  difficult  to  issue  publications  containing  substantial 
explanations  of  those  principles  so  as  to  spread  their  knowledge  in 
the  countries  interested,  and  it  is  then — that  is  to  say,  when  sufficient 
degrees  of  knowledge  of  those  principles  has  been  reached — that 
subsequent  actions  can  be  taken  to  obtain  a  substantial  uniformity  of 
the  laws  themselves,  as  far  as  it  is  possible  and  the  similarity  of  the 
principles  may  permit. 

There  is  no  doubt  that  there  is  a  vast  field  that  may  be  used  to 
advantage  for  the  increase  and  development  of  inter- American  mar- 
kets, and  it  is  equally  certain  that  the  establishment  of  direct  ex- 
change on  the  basis  of  the  dollar  unit  or  dollar  exchange,  as  already 
established  in  Cuba,  in  all  the  countries  of  America  would  contribute 
in  a  large  measure  to  extend  the  trade  among  the  different  countries 
of  this  Western  Hemisphere.  As  before  pointed  out,  Cuba  has 
already  taken  its  first  step,  so  far  as  the  establishment  of  the  dollar 
unit  is  concerned,  and  it  is  to  be  hoped  that  other  States  will  in  the 
course  of  time  endeavor  to  create  also  the  means  of  establishing  a 
system  of  direct  exchange. 

The  extension  of  longer  credits  to  Cuban  purchasers,  it  is  gener- 
ally thought,  would  be  perhaps  the  strongest  encouragement  to  an 
increase  of  trade  between  the  two  countries,  and  we  consider  this 
point  so  very  important  as  to  think  that  the  further  development  of 
that  trade  would  depend  upon  the  adoption  of  that  extension  of 
longer  credits.  It  is  a  fact  that  the  time  granted  for  the  payment 
of  credits  is  much  longer  when  it  is  given  by  European  merchants  to 
the  purchasers  of  their  commodities  than  is  the  case  when  the  same 
articles  are  purchased  from  the  United  States.  For  instance,  it  is 
well  known  that  often  even  three  and  four  annual  installments  are 
allowed  for  the  payment  of  machinery  bought  in  England,  France, 
Belgium,  or  Germany,  payment  being  guaranteed  by  the  same  ma- 
chinery, while  no  such  long  credits  can  be  obtained  from  American 
manufacturers,  who  seldom  allow  more  than  a  year  for  the  whole 
payment  of  a  whole  plant  or  part  of  a  plant  of  machinery.  Textiles 
are  sold  by  Germany  and  England  in  Cuba  at  six  months,  while  in 
the  United  States  only  30  to  45  days  are  allowed,  and  the  same  can 
be  said  of  other  commodities  and  articles,  such  as  hardware,  for 
example. 


390  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

A  very  important  point,  and  one  which  must  not  be  overlooked 
a  moment,  is  that  concerning  the  effect  which  tariff  laws  may  have 
on  the  trade  between  the  United  States  and  Cuba.  As  is  well  known, 
the  reciprocity  treaty  which  secured  to  Cuba  a  preferential  advan- 
tage in  the  importation  of  sugars  will  cease  from  May  1,  1916,  with 
the  effect  that  if,  according  to  the  present  tariff  laws,  sugar  from  all 
the  countries  in  the  world  is  admitted  in  the  United  States  free  of 
all  customs  duties,  the  reciprocity  treaty  will  lose  all  its  importance 
so  far  as  Cuba  is  concerned.  A  new  treaty  could  be  framed  in  order 
that  other  arrangements  could  be  arrived  at  of  mutual  benefit  to 
both  countries. 

At  all  events,  and  even  if  the  preferential  on  sugar  should  be  con- 
tinued, the  Cuban  delegates  feel  that  something  should  be  done  with 
respect  to  our  tobacco.  The  very  high  duties  which  our  tobacco  has 
to  pay  at  the  United  States  customhouses  should  be  reduced  consid- 
erably, because  otherwise  the  trade  in  that  staple  with  the  United 
States  will  in  the  end  languish  to  a  vanishing  point,  and  thereby 
not  only  Cuba  will  suffer,  but  also  the  United  States,  by  the  decrease 
which  will  ensue  in  the  purchasing  power  of  Cuba. 

It  must  be  borne  in  mind  that  the  tobacco  industry  is  only  of 
secondary  importance  to  that  of  the  sugar  trade,  and,  accordingly, 
if  we  are  helped  in  the  matter  of  our  tobacco  it  would  give  Cuba  a 
good  deal  more  purchasing  power,  which  would  of  course  be  used  for 
the  largest  part  in  the  buying  of  American  commodities,  while  the 
depression  of  that  industry  in  Cuba  is  very  apt  to  be  felt  in  all  the 
other  branches  of  trade. 

Briefly,  then,  we  may  point  out  that  Cuba  has  been  trying  to  im- 
prove her  postal  facilities  with  other  countries ;  that  she  is  at  present 
negotiating  a  parcel-post  treaty  with  the  United  States  and  with 
England,  and  the  first  steps  have  already  been  taken  with  Spain  to- 
ward the  same  end.  The  money-order  arrangements  may  also  be 
extended  to  all  such  countries  of  America  as  may  be  in  a  position  to 
enter  into  such  relations,  and  accordingly  we  arrive  at  the  conclusion 
that  the  concession  of  longer  credits  and  the  advances  of  money  to 
banks  in  Cuba  under  proper  conditions,  together  with  the  help 
which  is  so  necessary  to  develop  our  depressed  tobacco  industry, 
would  prove  to  be  the  main  factors  for  a  vigorous  growth  of  our 
commerce  with  the  United  States. 

PABLO  DESVERNINE. 
PORFIRIO  FRANCA. 
OCTAVIO  A,  ZAYAS. 


DOMINICAN  REPUBLIC 


391 


DOMINICAN  REPUBLIC, 


GROUP  CONFERENCE  REPORT. 


Hon.  WILLIAM  G.  McADOO,  Secretary  of  the  Treasury, 

Chairman  Pan  American  Financial  Conference. 
SIR  :  We  respectfully  submit  the  following  report : 

1.    PUBLIC   FINANCE. 

Public  revenues  and  expenditures  as  affected  l>y  recent  events  in 
Europe. — They  have  been  greatly  affected  by  the  war,  as  one  of  the 
chief  products  of  the  Dominican  Republic,  tobacco,  has  but  one 
market,  Germany ;  and  since  August,  1914,  we  have  had  to  keep  our 
crop  in  storage  and  have  been,  consequently,  deprived  of  the  means 
of  buying  what  we  used  to  buy  with  the  price  of  our  tobacco,  and 
deprived,  of  course,  of  the  import  duties  corresponding  to  those 
goods. 

Measures  adopted  to  meet  the  situation. — The  only  measures 
adopted  have  been  the  reducing  of  expenditures,  as  the  Dominican 
Government  does  not  want  to  create  new  debts. 

Proposed  remedies. — The  only  remedy  that  could  remove  the  cause 
of  this  evil  is  the  finding  of  a  new  market  for -Dominican  tobacco. 
It  is  desired  to  sell  it  in  the  United  States,  but  that  is  at  present 
quite  impossible,  because  the  import  duties  on  Dominican  tobacco 
in  the  United  States  are  prohibitive.  These  duties  are  not  prohibi- 
tive for  Cuba,  on  account  of  the  excellence  of  Cuban  tobacco,  which 
brings  high  prices,  thus  permitting  the  payment  of  those  duties,  less 
the  20  per  cent  reduction  granted  to  Cuba.  But  for  the  Dominican 
Republic  the  present  duty  is  prohibitive  because,  being  similar  in 
quality  to  that  of  Porto  Rico,  its  tobacco  could  only  be  introduced 
here  under  conditions  similar  to  those  granted  to  Porto  Rico.  The 
remedy  proposed  is  thus :  A  reciprocity  treaty  which  may  admit  this 
tobacco  to  the  markets  of  the  United  States  and  admit  in  exchange 
some  products  of  the  United  States  into  the  Dominican  Republic 
under  similar  conditions. 

Possibilities  of  international  cooperation. — The  procedure  sug- 
gested appears  to  us  to  be  the  best  form  of  cooperation  obtainable, 

393 


394  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

as  it  would  bring  good  results  not  only  to  the  tobacco  planters  and 
to  the  treasury  of  the  Dominican  Republic,  but  also  to  the  American 
producers  of  the  products  exchanged  for  Dominican  tobacco.  It 
would  be  of  benefit,  further,  to  all  American  manufacturers,  because 
the  Dominicans  would  buy  from  them  the  manufactured  products 
they  now  buy  in  Germany  with  the  price  of  their  tobacco.  They  will 
still  be  compelled  to  buy  from  Germany  after  the  war  if  the  sug- 
gested reciprocity  treaty  is  not  passed. 

2.  THE  MONETARY  SITUATION. 

Since  1900  the  legal  currency  of  the  Dominican  Republic  has  been 
the  American  dollar.  The  war  has  not 'affected  the  monetary  condi- 
tion except  in  that  it  has  stopped  Dominican  credits  in  Germany, 
thus  diminishing  the  purchasing  power  of  the  Republic. 

3.  THE  PRESENT  BANKING  SITUATION. 

Aside  from  a  very  few  private  bankers  and  merchants  who  are 
engaged  in  the  banking  business,  there  are  in  the  Republic  two 
banking  institutions,  the  Royal  Bank  of  Canada  and  the  Banco 
Nacional  de  Sto.  Domingo.  Neither  of  these  issues  bills  as  yet,  and 
neither  of  them  gets  extensive  deposits  from  the  public,  as  very 
few  people  have  as  yet  acquired  the  habit  of  depositing  their  savings 
outside  of  their  own  houses.  The  main  banking  business  at  the 
present  time  is  the  discounting  of  drafts  made  by  exporters  upon 
European  and  American  houses. 

The  banks  also  lend  money,  with  or  without  collateral,  to  the 
merchants,  manufacturers,  and  farmers,  charging  as  interest  from 
9  to  15  per  cent  a  year.  According  to  the  banking  law  of  the  Do- 
minican Republic,  any  firm  or  corporation,  national  or  foreign, 
either  independent  or  a  branch  of  a  foreign  bank,  may  issue  paper 
currency  up  to  the  amount  of  its  capital,  provided  that  the  capital 
be  no  less  than  $500,000,  that  it  fulfill  certain  conditions  prescribed 
by  the  Dominican  treasury  department,  and  that  it  keep  in  its  safe 
a  metallic  reserve  in  coin  to  the  value  of  half  the  amount  of  the 
issue.  The  latter  condition,  i.  e.,  that  the  bank  keep  in  its  own  safe 
the  guaranty  of  its  issue,  and  the  fact  that  the  people  have  been  in 
times  past  victimized  by  issues  not  well  guaranteed,  produce  a  condi- 
tion which  would  bring  about  the  failure  of  any  bank  of  issue  which 
could  not  offer  complete  assurance  of  its  strength.  There  is  no  ques- 
tion, however,  as  to  the  complete  success  of  branches  of  strong  and 
recognized  American  banks,  which,  enjoying  the  perfect  confidence 
of  the  people,  would  be  able  to  issue  circulating  notes  acceptable 
to  the  people  and  would  in  time  be  in  a  position  to  obtain  their 


GROUP  CONFERENCE  REPORTS — DOMINICAN  REPUBLIC.         39 5 

deposits  and  get  them  into  the  habit  of  making  payments  by  means 
of  checks. 

4.   THE  FINANCING  OF  PUBLIC  IMPROVEMENTS. 

The  underwriting  of  national  loans. 

(a)  The  Dominican  Republic  has  at  present  two  debts,  both  guar- 
anteed by  the  customhouse  duties,  one  of  $20,000,000  at  5  per  cent 
annual  interest  and  the  other  of  $1,500,000  at  6  per  cent  annual  inter- 
est.    In  payment  of  the  sinking  fund  and  interest  on  the  first  of 
these  debts  the  Dominican  Eepublic  remits  $100,000  per  month  to  the 
Guaranty  Trust  Company  of  New  York.    In  payment  of  the  sinking 
fund  and  interest  on  the  second  the  Government  remits  $30,000  per 
month  to  the  National  City  Bank  of  New  York.    The  Government 
has  never  failed  in  the  punctual  payment  of  these  remittances,  and 
the  delegates  have  no  instructions  to  negotiate  any  new  loan. 

The  underwriting  of  provincial  or  State  loans. 

(b)  The  Provinces  of  the  Republic  are  political  and  military  sub- 
divisions without  legal  capacity  for  obtaining  loans,  and  which  have 
never  obtained  any  loans  since  the  Dominican  Republic  has  had  a 
central  administration  and  all  provincial  affairs  have  been  directed 
from  the  capital. 

The  underwriting  of  municipal  loans. 

(c)  Municipalities  are  independent  entities  with  legal  capacity, 
under  certain  limitations,  to  administer  their  own  affairs,  and  to 
negotiate  loans  for  the  improvement  of  their  public  services,  with 
the  previous  authorization  of  the  House  of  Representatives.    Most 
of  them  have  up  to  this  time  obtained  loans  from  private  bankers, 
have  always  paid  them,  and  have  never  placed  loans  abroad.    There 
are,  however,  ample  opportunities  for  foreign  investment  in  this 
field. 

5.    THE  FINANCING  OF  PRIVATE  ENTERPRISES. 

(a)  The  Republic  has  only  two  railroads  and  is  in  need  of  more 
transportation  facilities,  a  need  which  is  now  being  partially  met 
by  the  building  of  highways,  for  which  work  the  Government  has 
at  present  money  deposited  in  the  Guaranty  Trust  Company  of  New 
York.  Notwithstanding  this,  however,  the  work  is  proceeding 
slowly  and  to  a  very  limited  extent.  This  means  that  there  are 
ample  and  highly  profitable  opportunities  for  the  investment  of 


396  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

capital  in  the  building  of  highways,  steam  railways,  electric  rail- 
ways, electric  light,  gas  and  power  plants. 

(&),  (<?),  (d).  The  few  manufactures  in  the  Dominican  Republic 
comprise  soap,  matches,  ice,  candles,  hats,  shoes,  harness,  cigars  and 
cigarettes,  alcohol,  sugar,  and  chocolate.  The  -sugar  industry  obtains 
its  capital  chiefly  from  bankers  in  New  York,  and  the  other  industries 
in  the  Republic.  The  merchants,  importers,  and  exporters  obtained 
their  credits  before  the  present  war  from  the  United  States,  Eng- 
land, and  Germany.  German  goods  were  bought  through  commission 
houses  in  Hamburg  and  other  German  cities  on  six  months'  credit, 
or  sometimes  longer,  with  annual  interest  at  6  per  cent  and  a  buying 
commission  up  to  5  per  cent.  German  merchants  could  get  the  goods 
from  the  German  manufacturers  upon  the  same  basis  with  respect  to 
time  of  payment  or  even  longer,  knowing  that  these  goods  were  in- 
tended to  be  sold  on  the  same  time  to  the  Dominican  merchants.  The 
Dominican  importers  were  thus  able  to  sell  to  the  retailers  on  time, 
making  a  good  deal  of  business  on  credit.  Since  the  outbreak  of  the 
war,  some  German  houses  in  New  York  have  extended  credit  to 
Dominican  importers,  but  have  thus  far  been  unable  to  meet  all  the 
necessities  created  by  the  war.  Consequently  the  importers  are 
handicapped  by  the  war.  It  is  further  to  be  noted  that  Dominican 
exporters  formerly  obtained  credit  in  Germany  to  finance  the  crops 
of  tobacco  and  other  products  sent  there  by  drawing  drafts  at  90 
days'  sight  without  collateral,  on  the  condition  that  the  merchants 
were  to  cause  products  sufficient  to  cover  the  amount  drawn  to  be  in 
Germany  three  or  four  days  before  the  draft  was  due.  That  was 
credit  based  upon  the  personal  knowledge  that  the  German  mer- 
chant or  banker  had  of  the  financial  responsibility  of  the  Dominican' 
exporter,  and  thus  it  was  a  common  practice,  when  the  goods  could 
not  reach  destination  on  time,  for  the  exporter  to  draw  an  accommo- 
dation draft  against  another  German  merchant  or  banker  to  pay  the 
first  one,  the  second  acceptor  to  be  reimbursed  with  the  products  of 
the  same  merchandise.  By  means  of  this  facility  the  exporter  of  the 
Dominican  Republic  was  able  to  advance  to  the  farmer  money  that 
was  to  be  paid  in  products.  As  that  system  of  credit  has  ceased  since 
the  outbreak  of  the  war,  the  conditions  of  the  Dominican  Republic 
have  been  upset,  affecting  the  farmer  as  well  as  the  exporter,  who 
are  hoping  that  the  American  importers  and  bankers  may  be  able  to 
arrange  to  render  the  same  service  which  the  Germans  formerly  ren- 
dered. To  bring  this  about,  it  is  necessary  that  the  American  im- 
porters and  bankers  gain  the  same  personal  knowledge  of  the 
Dominican  exporters  that  the  Germans  have. 

(e)  We  believe  in  the  possibility  of  securing  greater  uniformity 
in  laws  relating  to  trade  and  commerce,  in  customs  regulations,  and 
the  more  effective  protection  of  trade-marks. 


GROUP  CONFERENCE   REPORTS DOMINICAN   REPUBLIC.         397 

6.  THE  EXTENSION  OF  INTER- AMERICAN    MARKETS. 

(«),  (&),  and  (c).  Long-term  credits,  acceptances,  and  discounts, 
and  the  establishment  of  direct  exchange  have  been  explained  in 
connection  with  matters  treated  above. 

(d)  The  Dominicans  are  used  to  the  manufactured  products  of 
the  United  States,  and  may  get  into  the  habit  of  buying  new  goods 
through  the  medium  of  samples,  which  are  admitted  free  of  duty. 
With  regards  to  the  admission  of  samples,  the  Dominican  customs 
law  provides  as  follows: 

Class  O — Articles  free  of  duty:  No.  1191,  unsalable  samples  or 
those  that  have  no  commercial  value;  No.  1191  (a),  samples  of  a 
value  no  higher  than  $2,000,  introduced  by  bona  fide  commercial 
agents,  for  their  commercial  business,  provided  that  they  do  not 
remain  in  the  territory  of  the  Republic  more  than  four  months,  and 
that  bonds  be  given  to  the  satisfaction  of  the  collector,  the  latter 
being  obliged  to  inspect  the  samples  when  they  enter  and  when  they 
go  out  for  identification  of  the  same. 

(e)  The  Dominican  Republic  is  seriously  affected  by  the  tariff 
laws  of  the  United  States,  as  it  is  situated  between  Cuba,  which 
enjoys  a  reduction  of  20  per  cent,  and  Porto  Rico,  which  sends  here 
its  products  free  from  any  duty;  and,  although  our  lands  and  labor 
are  cheaper  than  those  of  Porto  Rico  and  Cuba,  the  competition  is 
very  hard  to  meet,  and  were  it  not  for  the  hope  of  the  entrance  of 
our  sugar  free  of  duty  in  the  United  States  our  financiers  would 
be  without  any  hope,  since  already  our  tobacco  is  without  any  market. 
On  the  other  hand,  the  Dominican  tariff  laws  do  not  injure  the 
United  States,  because  they  do  not  specially  favor  any  country. 

7.    MERCHANT   MARINE   AND   IMPROVED   TRANSPORTATION    FACILITIES. 

(a)  On  account  of  the  war,  by  the  elimination  from  the  seas  of 
the  German  vessels,  which  constituted  30  per  cent  of  all  the  tonnage 
that  arrived  at  Dominican  ports,  and  the  circumstances  of  the  scar- 
city of  ships  of  other  nationalities,  the  ocean  transportation  has 
suffered  a  great  deal  in  the  Dominican  Republic.  From  the  United 
States  there  is  only  one  line  of  passenger  ships  plying  between  New 
York  and  the  Dominican  ports,  making  two  or  three  trips  monthly, 
and  besides  there  are  some  freight  ships  between  these  ports  and 
New  York  or  Boston.  Ships  are  commonly  small  craft  of  2,000  to 
3,000  tons  and  of  a  speed  of  from  10  to  12  knots  an  hour,  which 
make  their  trips  from  New  York  to  the  first  Dominican  port  in 
five  or  six  days  and  spend  eight  or  nine  days  in  reaching  San 
Domingo  City;  it  is  thus  desirable  that  the  number  and  the  speed 
of  the  ships  be  increased,  as  there  are  freight  and  passengers  to 
justify  this  improvement. 


398  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

(b)  The  Dominicans  have  a  parcel-post  treaty  with  the  United 
States  from  which  desirable  results  have  not  been  obtained  on 
account  of  the  absence  of  a  money-order  system  with  the  United 
States,  although  a  domestic  system  is  in  effect  in  the  Republic  itself. 
The  postage  rate  between  the  Dominican  Republic  and  the  United 
States  is  150  per  cent  higher  than  the  one  existing  between  the 
United  States  and  Cuba  and  Mexico.  It  is  thus  desirable  and  neces- 
sary for  the  improvement  of  the  relations  between  the  two  countries 
that  a  reduction  be  made  in  the  postage  rates  and  that  a  money- 
order  system  be  established.  In  furtherance  of  these  objects  the 
Dominican  delegation  proposed  on  May  24  for  the  consideration  of 
the  conference  the  following  proposition : 

The  task  of  rapidly  promoting  a  permanent  increase  of  commer- 
cial business  between  the  United  States  and  the  Latin-American 
countries  is  more  than  anything  else  an  educational  one. 

The  war  that  is  devastating  half  of  the  civilized  world  has  already 
produced,  and  will  continue  to  produce  for  some  time  to  come,  a 
tangible  increase  of  inter- American  commerce,  as  an  inevitable  re- 
sult of  the  closing  of  the  ports  of  Germany  and  of  Austria  and  of 
the  withdrawal  from  the  seas  of  the  merchant  vessels  of  those  two 
nations. 

But  the  paralysis  of  the  German  and  Austrian  commerce  is 
only  temporary;  and  if  an  educational  campaign,  to  teach  the 
countries  of  Latin- America  that  here  in  the  United  States  are  pro- 
duced or  may  be  produced  all  the  manufactured  goods  formerly  ex- 
ported by  Europe,  is  not  undertaken  at  once  and  with  tenacity  un- 
doubtedly when  the  war  is  over  the  business  will  return  in  great 
part  to  the  channels  it  followed  before  the  war.  This  must  be  true 
for  the  simple  reason  that  so  short  an  experience  with  the  goods  of 
the  United  States,  even  though  it  were  to  be  supported  by  the  good 
will  of  the  Latin-American  Governments,  would  be  impotent  by 
itself  to  destroy  habits  and  prejudices  of  many  years  standing.  This 
result  is  the  more  likely  to  follow  if  little  be  done  to  convince  Latin- 
Americans  that  the  diversion  of  trade  which  came  about  through 
necessity  can  best  be  continued  upon  grounds  of  unquestionable  con- 
venience and  profit. 

In  an  international  educational  campaign  the  most  powerful 
weapon  is  the  post.  An  army  of  traveling  salesmen,  as  big  as  it 
might  be,  can  not  be  compared — either  in  the  rapidity  of  its  effect 
or  in  its  ability  to  reach  the  remoter  regions  of  a  country,  or  in  its 
possibility  of  serving  equally  the  small  and  the  large  manufacturers 
and  exporters — with  the  effect  of  letters,  circulars,  and  the  news- 
papers. 

The  efficiency  of  the  post  is  undoubtedly  more  immediately  useful 
to  the  producer  than  to  the  consumer,  and  to  the  manufacturer  than 
to  the  agriculturist ;  and  in  this  respect  the  United  States  should  be 
chiefly  interested  in  such  an  improvement.  As  consumers  of  manu- 
factured goods  and  exporters  chiefly  of  agricultural  products  the 
Latin- Americans  have  little  to  advertise,  since  they  know  that  their 
sugar,  their  cocoa,  their  hemp,  their  rubber,  and  their  coffee  will  be 
sold  here  even  though  not  advertised;  and  naturally  the  Latin- 


GROUP  CONFERENCE   REPORTS DOMINICAN   REPUBLIC.         399 

Americans  may  not  see  the  necessity  of  undertaking  a  campaign  for 
the  purpose  of  educating  their  own  people  with  regard  to  the  fact 
that  the  goods  they  have  previously  obtained  in  Europe  are  also  to 
be  obtained  in  the  United  States.  But  this  difficulty  could  easily  be 
met  by  providing  that  the  signatory  Governments  should  contribute 
to  the  payment  of  the  general  service  in  proportion  to  the  benefit 
received  by  each. 

In  view  of  these  considerations  the  delegation  of  the  Dominican 
Republic  has  the  honor  of  submitting  to  the  conference  the  recom- 
mendation that  a  special  committee  be  appointed  to  study  Latin- 
American  postal  conditions  and  to  propose  to  all  the  Governments  of 
America  a  plan  for  a  Pan  American  postal  convention  which  shall 
include  the  following  provisions : 

1.  That  the  letter  postage  and  the  postage  on  circulars  and  printed 
matter  between  each  and  every  country  of  the  Pan  American  Union 
be  established  upon  the  same  basis  of  rates  as  that  now  existing 
between  the  United  States  and  Cuba  and  Mexico. 

2.  The  adoption  by  all  the  countries  of  the  Pan  American  Union 
of  the  same  rules  and  the  same  rates  for  newspaper  postage  as  that 
now  existing  in  the  United  States. 

3.  The  adoption  by  all  the  countries  of  the  Pan  American  Union 
of  a  uniform  service  of  postal  money  orders  and  parcel  post. 

4.  The  establishment  of  a  Pan  American  Postal  Commission,  with 
headquarters  in  Panama  City,  which  shall  act  as  a  clearing  house  for 
the  postal  administration  of  all  the  signatory  governments. 

Pending  the  consideration  and  adoption  of  the  foregoing  proposal 
the  committee  submits,  as  a  suggestion  for  relieving  the  immediate 
demands  of  the  situation,  the  following  resolution : 

RESOLUTION  LOOKING  TO  THE  RELIEF  OF  IMMEDIATE  DIFFICULTIES  IN  CON- 
NECTION WITH  THE  POSTAL  LAWS. 

Whereas  the  Postmaster  General  of  the  United  States  has  announced 

the  willingness  of  the  United  States  Government  to  establish  the 

domestic  rate  of  postage  reciprocally  between  any  Latin- American 

country  and  the  United  States ;  and 
Whereas"  the  United  States  Government  controls  the  rate  of  postage 

on  all  matter  mailed  in  the  United  States ; 

Resolved,  That  the  Dominican  Eepublic  committee  recommend  to 
the  Postmaster  General  of  the  United  States  the  establishment  of  the 
present  domestic  rate  of  postage  for  letters  addressed  to  each  and 
every  country  in  Latin  America  without  regard  to  the  rate  applied 
to  letters  destined  to  the  United  States ;  and  be  it  further 

Resolved,  That  appropriate  stamps  be  designed  and  issued  to  com- 
memorate this  important  step  taken  on  the  side  of  the  United  States 
to  facilitate  the  trade  with  other  American  countries;  and  be  it 
further 

Resolved,  That  a  copy  of  these  resolutions  be  transmitted  to  the 
honorable  the  Postmaster  General  of  the  United  States. 

Kespectfully  submitted. 

FRANCISCO  J.  PEYNADO, 

Chairman. 


ECUADOR 


98257°— 15 26  401 


ECUADOR. 


GROUP  CONFERENCE  REPORT. 


Hon.  WILLIAM  G.  McAooo,  Secretary  of  the  Treasury ', 

Chairman  Pan  American  Financial  Conference. 
SIR:  The  Ecuador  committee  has  conferred  with  the  delegates  of 
the  Ecuadorian  Government  on  the  subjects  mentioned  in  the  pro- 
gram and  begs  to  report  as  follows: 

I.  PUBLIC  FINANCE. 

(a)  The  fiscal  revenues  of  Ecuador  amounted,  before  the  war,  to 
approximately  $10,000,000  American  gold,  consisting  mostly  in  cus- 
toms duties  (on  imports  $4,000,000  and  on  exports  $2,600,000,  alco- 
hol tax  $480,000,  salt  monopoly  $360,000)  and  internal  resources. 
The  decrease  in  the  importations  has  necessarily  decreased  the  figures 
about  one  and  one-half  to  two  million  dollars,  so  that  at  the  present 
it  is  estimated  that  the  total  income  will  aggregate  about  $8,000,000. 

Export  duties  have  not  been  reduced  appreciably,  as  they  are 
mostly  on  the  gross  weight  of  certain  articles  exported,  namely, 
cacao,  coffee,  hides,  rubber,  etc.,  and  almost  normal  quotations  on  each 
have  been  reported. 

(o)  The  only  measures  adopted  to  meet  the  actual  conditions 
caused  by  the  war  were  the  borrowing  of  money  by  the  Government 
from  one  of  the  local  banks  and  the  temporary  suspension  of  gold 
exports  and  of  the  conversion  of  notes.  This  last  resort  was  not 
utilized  by  all  the  banks,  and  those  that  did  so  have  been  constantly 
improving  their  cash  reserves.  It  is  considered  that  these  now  have 
about  one-half  of  the  legal  gold  reserve. 

(c)  The  only  immediate  relief  required  in  this  direction  seems  to 
be  the  securing  of  a  loan  by  the  Government  to  pay  the  banks  its 
indebtedness  so  that  these  institutions,  handicapped  by  the  heavy 
account  of  the  treasury,  may  increase  their  gold  reserves  and  better 
protect  their  note  issue. 

(d)  Possibility  of  international  cooperation  can  only  be  effected 
by  lending  the  Government  the  money  needed,  three  to  five  million 
dollars,   on  reasonable  conditions  and  for  a  period  which  would 
permit  it  to  repay  the  money  at  its  convenience. 

403 


404  PAN   AMERICAN    FINANCIAL   CONFERENCE. 

OBSERVATIONS. 

The  debt  of  the  Government  to  the  local  banks  is  partly  consoli- 
dated to  be  liquidated  in  1927  and  partly  in  current  account.  The 
consolidated  debt,  amounting  to  about  $2,500,000,  earns  7  per  cent 
interest.  The  floating  debt  amounts  to  about  $1,500,000,  or  a  total 
of  about  $4,000,000. 

In  addition  to  the  debt  to  the  banks  the  Government  owes  about 
a  million  of  6  per  cent  internal  bonds  and  $1,500,000  of  floating  debt, 
making  a  total  of  about  $6,500,000. 

The  foreign  debt  proper  amounts  to 

4  per  cent  salt  bonds $636,  750 

4  per  cent  condores  bonds 340,000 


976,  750 
Arrears,  about 23,  250 


1,000,000 

and  the  guarantee  of  the  bonds  issued  by  the  Guayquil  £  Quito 
Railway  to  the  extent  of  $859,740  per  annum  until  December  31, 1931. 
The  amount  outstanding  of  these  bonds  is  as  follows : 

6  per  cent  prior  lien  bonds $1, 975,  000 

5  per  cent  first-mortgage  bonds _  10,  737,  000 


12,  712,  000 

interest  on  the  former  has  been  paid  to  date;  interest  on  the  latter 
is  due  for  five  coupons,  amounting  to  $1,342,125. 

Ecuador  has  also  guaranteed  the  interest  on  200,000  pounds  sterling 
of  bonds  issued  by  the  Ecuador  Central  Railway  (about  $60,000  per 
annum)  when  the  line  is  completed,  and  on  7,000,000  francs  of  bonds 
issued  by  the  French  Railway  Co.  of  Ecuador  (about  $70,000  per 
annum) . 

II.    THE  MONETARY  SITUATION. 

(a)  Conditions  prior  to  the  outbreak  of  the  war  were  perfectly 
satisfactory.  The  country  was  and  still  is  (except  for  the  temporary 
restrictions)  on  a  gold-standard  basis. 

The  monetary  unit  is  the  sucre  (0.8136  grams  gold  900  fine)  equiva- 
lent to  $0.4866  American  gold.  Notes  are  issued  by  banks  established 
in  conformity  with  the  law  and  must  be  protected  by  50  per  cent 
gold  coin. 

(&)  The  effects  of  the  war,  curtailing  credits  everywhere  and  dis- 
turbing in  such  a  grave  manner  all  foreign  transactions,  were  felt 
during  the  first  few  months  after  the  declaration  of  war.  Condi- 
tions have  been  improving  steadily,  and  the  sale  of  most  of  the  ex- 
port crops  has  permitted  the  banks  to  maintain  rates  of  exchange 
well  nigh  within  their  normal  limits  of  fluctuations.  The  par  value 


GROUP  CONFERENCE  REPORTS — ECUADOR.          405 

of  the  dollar,  United  States,  is  2.05  sucres,  and  the  rate  of  exchange 
fluctuated  between  2  and  2.11  sucres  in  normal  times  and  advanced 
to  2.20  sucres,  or  about  4|  per  cent,  premium. 

(c)  If  Ecuador  can  maintain  the  sale  of  its  export  products  and 
thus  provide  itself  with  funds  to  meet  its  foreign  needs,  there  will 
be  no  necessity  of  any  outside  cooperation.    Its  main  export  product 
is  cacao,  which  has  doubled  in  price  (about  120  shillings  per  quintal 
against  60  shillings  in  April  of  1914),  and  although  the  rates  of 
transportation  have  increased  enormously  there  is  a  large  difference 
in  favor  of  the  country.    The  crop  amounts  now  to  about  47,000  tons, 
and  the  increase  in  price  of  only  $5  per  quintal  gives  the  country  an 
added  value  in  this  line  of  nearly  $5,000,000,  enough  to  offset  any 
loss  in  the  other  products. 

The  total  exports  amount  to  about  $15,000,000  and  imports  about 
$10,000,000,  leaving  a  favorable  trade  balance  of  some  $5,000,000, 
which  permits  the  country  to  maintain  its  exchange  on  a  level  even 
under  the  present  restricted  condition  of  its  currency. 

(d)  The  gold  standard  can,  therefore,  be  maintained  unless  some- 
thing unforeseen  happens.     Should  the  Government  fail  to  secure 
a  loan  with  which  to  pay  the  banks,  the  latter  would  be  able  to 
raise  their  gold  reserves  to  the  normal  rates  by  simply  accumulat- 
ing the  surplus  of  the  trade  balance.    They  may  not  export  it  in  gold 
coin,  but  they  can  carry  balances  with  American  banks,  which  is  just 
as  good  for  exchange  purposes. 

III.   THE  PRESENT  BANKING  SITUATION. 

(a)  The  banking  facilities  in  Ecuador  were  quite  satisfactory  at 
the  outbreak  of  the  war.  Its  banks  could  attend  easily  the  needs 
of  the  country,  and  the  rate  of  interest  for  commercial  loans  was 
7  to  9  per  cent  per  annum — a  very  common  rate  in  Latin  America. 

Ecuador  has  four  banks  of  issue :  In  Guayaquil,  Banco  del  Ecua- 
dor (capital  3,000,000  sucres),  Banco  Comercial  y  Agricola  (capital 
5,000,000  sucres) ;  in  Quito,  Banco  de  Pichincha  (capital  1,500,000 
sucres) ;  in  Cuenca,  Banco  del  Azuay  (capital  400,000  sucres).  There 
are  two  mortgage  banks,  Banco  de  Credito  Hipotecario  (capital 
1,000,000  sucres),  Banco  Territorial  (capital  1,000,000  sucres),  and 
two  mixed  banks,  Banco  Comercial  y  Agricola,  which  has  a  mort- 
gage department,  and  the  Compania  de  Credito  Agricola  e  Indus- 
trial (capital  1,000,000  sucres),  the  last  being  a  mortgage  and  sav- 
ings bank. 

The  outbreak  of  the  war  caused,  of  course,  a  restriction  in  the  cur- 
rent transactions  of  all  the  banks,  but  they  are  steadily  resuming 
their  normal  state,  and  now  they  may  be  said  to  be  almost  in  as  good 
condition  as  they  were  last  July. 


406  PAN  AMERICAN   FINANCIAL  CONFERENCE. 

(&)  Branches  and  agencies  of  foreign  banks  are  not  provided  for 
in  the  banking  laws,  and,  although  they  are  not  forbidden,  there  are 
no  definite  conditions  under  which  they  can  operate. 

Legal  reserves  are  enforced  only  on  note  issue,  but  not  on  deposits, 
and  the  general  provisions  in  regard  to  agencies  of  foreign  corpora- 
tions set  forth  in  the  commercial  code  are  too  general  to  cover,  espe- 
cially banking  institutions. 

Direct  exchange  has  existed  for  many  years;  that  is,  drafts  are 
drawn  in  dollars  on  the  United  States  and  drafts  from  the  United 
States  on  Ecuador  are  drawn  in  dollars  as  well  as  in  pounds  sterling. 
Banking  connections  being  so  limited  with  the  United  States,  mer- 
chants often  use  the  bill  of  exchange  on  London,  as  a  means  of  set- 
tling their  accounts.  As  London  banking  connections  are  becoming 
more  difficult  every  day,  the  turning  over  to  the  United  States  coulcl 
easily  be  accomplished  if  American  banks  would  establish  a  means 
of  financing  shipments  as  liberally  as  London  did.  Bills  on  New 
York  at  60  days'  sight,  if  drawn  by  responsible  parties  on  first-class 
banks  or  bankers,  are  easily  negotiated.  The  commercial  letter  of 
credi1'  is  little  used,  as  exporters  draw  on  their  correspondents  clean 
or  documentary  bills,  and  local  banks  do  not  demand  authority  of 
drawees  except  in  special  cases. 

(c)  Further  international  cooperation  is  absolutely  necessary  if 
it  is  desired  to  secure  for  the  United  States  the  advantages  of  being 
the  distributing  and  clearing  center  of  Ecuadorian  trade.  This  can 
be  secured  by  extending  banking  credit  to  exporters  and  banks  just  as 
much  for  shipments  intended  for  this  country  as  for  those  directed 
to  other  countries.  For  this  it  should  be  possible  that  American 
banks  make  due  arrangements  with  their  foreign  correspondents  to 
transfer  values  to  their  accounts  against  shipping  papers  or  re- 
drawing, as  the  case  may  be. 

This  work  is  especially  complicated  at  this  time,  but  it  is  easier  for 
American  banks  to  do  this  than  for  Ecuadorian  banks  or  exporters. 
For  instance,  formerly  a  shipment  of  cacao  to  Spain  was  financed 
by  the  exporter  of  Ecuador  drawing  on  London  for  account  of  the 
Spanish  buyer,  who  made  the  arrangements  through  a  Spanish  bank 
(for  the  agent  of  the  British  bank  in  Spain).  Now,  it  should  be 
possible  that  the  same  shipment  be  financed  by  permitting  the  ex- 
porter of  Ecuador  to  draw  on  an  American  bank  against  shipping 
papers  for  Spain  and  either  arrange  with  the  Spanish  buyer  to  draw 
against  him  from  here  (in  dollars  or  pesetas)  or  to  arrange  with  a 
Spanish  bank  to  transfer  the  credit. 

Should  there  be  an  agency  of  the  American  bank  in  Spain,  the 
transaction  would,  of  course,  be  easier,  and  Spanish  shipments  could 
then  be  financed  also. 


GROUP   CONFERENCE   REPORTS ECUADOR,  407 

IV.    TlTE  FINANCING  OF  PUBLIC  IMPROVEMENTS. 

Ecuador  has  not  borrowed  any  money  directly  for  public  works 
nor  has  offered  any  of  its  own  bonds  for  other  purposes.  Its  out- 
standing obligations  originated  in  the  consolidation  of  floating  debts 
or  guaranties  of  issues  made  by  constructing  companies  as  above 
mentioned. 

The  bonds  mentioned  as  "salt  bonds"  were  issued  to  pay  three 
coupons  of  the  bonds  issued  by  the  railway  company,  and  the 
"  condores  "  bonds  (called  "  condores "  because  they  are  issued  in 
Ecuador  currency;  1  condor  equals  10  sucres)  were  issued  to  pay 
off  a  small  balance  of  the  old  external  debt. 

No  issue  has  been  made  directly  by  the  Government  (other  than 
the  two  mentioned),  although  it  might  be  very  desirable  to  con- 
solidate the  guaranteed  bonds,  clearing  a  situation  which  is  embar- 
rassing for  the  country,  as  its  customs  revenues  are  all  pledged  to 
a  guaranty  in  a  very  unreasonable  way.  In  fact,  the  guaranty  in 
favor  of  the  railway  bonds  amounts  to  $859,740  per  annum  and  the 
revenue  pledged  to  the  service  amounts  to  $6,600,000  (import  duties 
$4,000,000  and  export  duties  $2,600,000).  There  is  no  reason  why 
the  country  should  tie  up  $6,600,000  to  guarantee  only  about  13  per 
cent  of  this  amount. 

There  are  no  provincial  loans  outstanding  or  authorized.  The 
Provinces  are  not  permitted  to  contract  for  loans  except  as  advances 
of  taxes  to  be  collected.  All  loans  are  contracted  only  by  the  Gov- 
ernment itself. 

The  municipalities  owe  very  little  money,  and  it  is  due  mostly  to 
local  banks  or  capitalists.  Only  the  municipality  of  Guayaquil  has 
an  indebtedness  of  some  importance,  due  partly  to  the  banks  and 
partly  of  a  floating  character.  The  municipality  of  Quito  has  been 
authorized  to  contract  a  loan  for  public  works,  but  it  has  only  raised 
a  small  amount,  largely  with  local  banks. 

Fiscal  as  well  as  municipal  finances  have  not  been  as  satisfactory 
as  could  be  desired.  Much  has  been  gained  during  the  later  years, 
but  the  decentralization  of  taxes  to  a  certain  extent  has  been  respon- 
sible for  a  confusion  in  the  collection  of  the  same  and  the  consequent 
improper  balancing  of  revenues  and  expenses. 

The  last  figures  show  a  deficit,  partly  because  of  extraordinary 
expenses  due  to  political  disturbances.  The  administration  is,  how- 
ever, making  all  efforts  to  keep  within  its  own  income  and  payments 
are  met  almost  in  a  normal  way. 

V.    TlIE  FINANCING  OF  PRIVATE  ENTERPRISES. 

(a)  There  are  only  three  railway  companies  operating  lines  in  the 
country — the  Guayaquil  &  Quito  Kailway  Co.,  operating  the  line 


408  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

between  Guayaquil  and  Quito  (286  miles) ;  the  Ecuador  Central, 
operating  the  Manta  Kailway  (40  miles)  ;  and  the  French  company, 
operating  a  small  part  of  the  line  from  Bahia  to  Quito  (about  35 
miles) .  These  have  been  financed  in  Europe  and  the  need  for  money 
has  been  met  already.  Further  financing  is  limited  at  present  to  the 
settlement  of  the  situation  of  the  first-named  railway,  which  would 
call  for  a  reorganization  of  its  finances  in  full.  This  is  a  compli- 
cated matter  that  needs  readjustment  and  should  be  looked  into  care- 
fully. 

We  understand  that  the  refinancing  of  the  other  two  companies 
might  be  desirable,  but  this  requires  looking  into  their  affairs  more 
closely  than  can  be  done  at  present. 

There  are  two  street  car  lines  in  Guayaquil,  both  of  which  need 
looking  into.  One  of  these  companies  owns  an  incomplete  electric 
plant,  which  needs  money  to  finish  its  installation. 

Electric  light  exists  in  very  few  cities,  there  being  a  wide  field  for 
the  extension  of  this  service.  Water  service  is  very  deficient,  there 
being  also  great  possibilities  in  the  matter  of  supplying  many  of  the 
cities  as  well  as  for  irrigation  purposes. 

Sewerage  is  another  line  of  immense  importance  and  is  needed  in 
almost  every  city.  All  these  works  demand  a  careful  study  as  to  the 
ability  of  the  respective  communities  to  pay  for  them.  No  doubt 
satisfactory  arrangements  could  be  made  and  the  Government  is 
quite  willing  to  assist  them  all. 

The  very  important  work  of  sanitating  the  principal  port — Guaya- 
quil— is  in  the  hands  of  a  very  responsible  concern,  but  it  is  progress- 
ing very  slowly,  due  to  lack  of  immediate  funds.  It  would  be  most 
desirable  to  look  into  this  matter  promptly  and  to  assist  the  coun- 
try if  possible  in  securing  this  service  at  an  early  date. 

(b)  Merchants  need  reasonable  credit.     They  have  been  accus- 
tomed to  long  and  easy  terms  from  Europe,  and  they  can  not  buy 
for  cash  as  has  been  the  rule  in  America.    It  is  suggested  that  Ameri- 
can business  people  interested  in  extending  their  trade  consult  the 
needs    of    their   buyers,  meeting   their  wishes  as  far  as    possible. 
Ninety-day  acceptances  would  be  something  quite  within  the  possi- 
bilities and  would  meet  their  demands.     Of  course  this  is  a  matter 
of  adjustment  with  each  customer  and  depends  on  the  kind  of  goods 
sold. 

(c)  Crops  are  financed  within  the  country.     The  only  way  in 
which  foreign  credit  interfered  was  by  permitting  exporters  to  draw 
in  advance  of  shipments  for  the  purposes  of  advancing  money  to 
farmers.     There  is  no  reason  why  this  should  not  be  done  in  the 
United  States  as  well,  especially  with  such  clients  as  are  perfectly 
solvent  and  honorable. 


GROUP  CONFERENCE  REPORTS — ECUADOR.          409 

(d)  It  would  be  very  advisable  to  secure  the  means  of  protecting 
these  advances  as  well  as  credit  for  merchandise  shipped.    Ecuador 
has  a  "warrant"  law  permitting  the  issue  of  certificates  for  goods 
stored  in  the  customhouse  of  Guayaquil  and  which  are  negotiable. 
These  could  be  used  to  protect  d/p  drafts.     Ecuador  has  special 
provision  in  its  code  of  commercial  laws  covering  collateral  loans 
whereby  special  protection  is  given  to  securities  and  personal  prop- 
erty collaterals. 

(e)  To  secure  uniformity  of  laws  in  certain  lines  it  is  necessary 
that  a  typical  law  be  drafted  and  submitted  to  Ecuador  as  well  as 
to  all  other  countries  of  Latin  America.    The  country  is  quite  will- 
ing to  agree  to  all  that  is  reasonable  and  which  might  tend  to  im- 
prove general  conditions  of  trade.    Of  course  this  requires  the  pas- 
sage of  laws  in  Congress  which  meets  in  August  every  year.    There 
is  no  doubt  as  to  the  possibility  of  securing  such  laws,  provided  they 
are  intended  solely  for  the  betterment  of  commercial  relations. 

VI.    THE  EXTENSION  OF  INTERAMERICAN  MARKETS. 

(a)  There  is  no  need  of  extending  long-term  credits  as  was  done 
formerly  from  Europe.    Reasonable  credit  is  desired,  but  such  long 
terms  as  9  and  12  months  are  only  an  undue  inducement  to  over- 
extension  and  the  creation  of  artificial  trade.     Three  months'  ac- 
ceptance, and  perhaps  six  months  in  some  cases,  would  be  all  that 
is  needed.     In  only  one  case  could  long  terms  be  commended — for 
improving  farming  by  allowing,  as  is  done  in  this  country,  as  much 
as  three  years  to  pay  for  agricultural  machinery  and  also  for  mining 
machinery.     But  this  requires  special  guaranties,  such  as  chattel 
mortgages,  which  do  not  exist. 

(b)  Acceptances  against  bills  of  lading  as  a  substitute  for  open 
accounts  are  desirable,  as  they  permit  the  American  exporter  to  turn 
over  his  money.    But  this  requires  that  such  bills  be  discounted  in 
the  United  States.    Otherwise  the  transaction  is  hardly  possible.    To 
keep  an  accepted  draft  until  maturity  is  just  as  bad  as  to  sell  on 
open  account.     Arrangements  should  be  made  to  facilitate  the  dis- 
count of  bills  with  shipping  papers  attached.     Before  the  war  this 
was  possible  with  almost  every  country;  to-day  it  is  restricted  to 
very  few  countries — Ecuador  being  deprived  of  the  facility  at  pres- 
ent for  no  good  reason. 

(d)  Ecuador  has  a  long-time  trade  with  the  United  States,  and 
almost  all  her  goods  are  adaptable  to  that  market.  It  has  been  the 
practice  of  American  manufacturers  to  insist  on  selling  their  goods 
just  as  they  made  them;  but  experience  has  taught  them  that  they 
must  conform  with  the  requirements  of  their  buyers.  This  is  done 
now  to  a  large  extent.  It  would  be  advisable  to  continue  the  policy 
of  satisfying  the  buyer  as  far  as  possible. 


410  PAN  AMERICAN   FINANCIAL   CONFERENCE. 

(e)  There  is  no  discrimination  in  Ecuador  in  favor  of  or  against 
the  United  States  in  the  matter  of  import  duties.  All  countries  are 
under  the  same  tariff.  Some  goods  are  very  heavily  taxed,  and  in 
each  individual  case  it  is  possible  to  secure  amendments  to  the  tariff 
if  good  reasons  are  given.  These  changes,  however,  can  not  be  made 
except  by  Congress,  which  meets  once  a  year.  It  must  be  borne  in 
mind  that  the  country's  revenue  is  derived  mainly  from  its  import 
duties  and  that  it  is  a  tariff  for  revenue  only. 

VII.  MERCHANT  MARINE  AND  IMPROVED  TRANSPORTATION  FACILITIES. 

(a)  Present  transportation  facilities  are  very  limited,  as  very  few 
boats  call  at  the  ports  of  Ecuador.  The  steamers  of  the  Pacific  Steam 
Navigation  Co.  (owned  by  the  Royal  Mail  Line)  call  at  regular  inter- 
vals, but  the  service  is  very  deficient.  These  boats  are  permitted  to 
call  at  all  ports  and  to  do  a  coastwise  trade.  As  a  rule  they  are  old 
and  slow  vessels  and  are  charging  to-day  exorbitant  rates.  The  Peru- 
vian steamship  companies  also  call  at  Guayaquil,  but  they  have  no 
definite  itinerary.  Occasionally  steamers  going  through  the  Panama 
Canal  call  at  Guayaquil  if  they  are  given  enough  cargo.  The  entire 
service  from  Ecuadorean  ports  to  Panama  for  transshipment  and  to 
New  York  and  eventually  to  Europe  is  irregular,  and  for  this  reason 
shipments  are  uncertain. 

The  Panama  Railroad  steamship  line  receives  cargo  for  Ecuador  to 
be  transshipped  at  Panama  and  also  brings  goods  transferred  at  this 
port  from  the  Pacific  side  steamers.  It  might  be  advisable  that  this 
company,  which  is  owned  exclusively  by  the  American  Government, 
extend  its  trips  to  Guayaquil  at  least,  and  if  possible  improve  its 
service.  Ecuador  can  produce  a  large  quantity  of  fruit  which  could 
be  handled  if  satisfactory  refrigerating  service  be  supplied.  The 
United  Fruit  line  also  takes  and  brings  cargo  to  and  from  Ecuador 
in  the  same  manner  as  the  American  Government  line,  and  no  doubt 
it  will  extend  its  services  to  Ecuadorean  ports  in  due  time. 

We  are  informed  that  the  Government  of  Ecuador  is  prepared  to 
grant  every  facility  to  any  steamship  company  which  would  estab- 
lish a  regular  line  and  charge  reasonable  rates.  We  understand  that 
it  would  be  possible  to  secure  payment  for  transportation  of  mails, 
and  that  exemption  of  port  charges  can  be  secured  also. 

Encouragement  for  the  development  of  the  service  can  only  be 
,given  by  Government  assistance.  It  is  not  possible  to  foresee  to 
what  extent  the  business  can  grow  at  this  time,  as  no  one  knows 
what  can  happen  under  the  abnormal  conditions  of  the  world.  But 
it  can  be  more  or  less  safely  stated  that  the  export  products  of 
Ecuador  being  salable  in  times  of  war  the  gross  tonnage  of  100,000 
to  120,000  tons  for  exports  can  be  maintained,  and  that  imports  for 
some  125,000  to  150,000  are  more  or  less  secured. 


GROUP   CONFERENCE   REPORTS ECUADOR.  411 

( b)  Postal  facilities  can  be  improved  by  the  extension  of  the  postal 
money-order  service,  the  reduction  of  postage,  and  the  betterment  of 
mail  transportation.  It  seems  that  only  one  steamship  company 
carries  the  mails  between  New  York  and  Panama,  where  they  are 
transshipped.  This  causes  an  unnecessary  delay,  which  can  be 
remedied  by  using  all  mail  steamers  both  ways. 

TAX  ON   SALESMEN  AND  DUTY  ON   SAMPLES. 

The  present  tax  in  most  Republics  is  so  high  that  many  manufac- 
turers are  deterred  from  making  experimental  trips.  It  is  suggested 
that  if  the  charge  were  reduced  to  a  reasonable  sum  and  one  pay- 
ment to  cover  all  cities  in  the  Republic,  the  additional  number  of 
travelers  would  more  than  make  up  the  amount  now  collected 
from  a  few. 

TARIFF    OR   DUTY   ON    SAMPLES    AND   THE   REMEDY    SUGGESTED. 

The  present  plan  of  charging  duty  on  such  samples  as  boots  and 
shoes,  even  where  the  duty  is  returned,  is  so  unsatisfactory  and 
expensive  that  manufacturers  have  found  it  necessary  to  destroy  or 
mutilate  many  hundred  dollars'  worth  of  samples  each  year  so 
that  they  may  be  entered  duty  free.  They  are  thus  put  to  large 
pecuniary  loss  and  do  not'  feel  able  to  show  as  full  a  line  of  mer- 
chandise. For  this  loss  to  them  the  Republics  get  no  compensating 
advantage;  instead,  the  reverse.  We  would  respectfully  suggest  as 
a  remedy  that  each  Republic  allow  salesmen  to  deposit  with  the 
customs  authorities  a  bond  issued  by  some  reputable  bonding  com- 
pany in  the  United  States,  said  bond  to  be  a  guaranty  that  the 
samples  will  be  taken  out  of  the  Republic.  Bond  to  be  returned  to 
the  salesman  without  delay  when  such  samples  have  been  delivered 
to  the  customs  for  reshipment. 

GENERAL  OBSERVATION. 

Due  to  misunderstandings  that  have  existed  in  connection  with 
certain  enterprises  that  have  been  undertaken  by  individuals  in  Ecua- 
dor there  has  not  been  as  cordial  a  desire  on  the  part  of  the  people  of 
Ecuador  and  the  United  States  to  cooperate  with  each  other  as  should 
be  the  case.  A  careful  study  of  the  facts  leads  this  committee  to 
believe  that  the  two  countries  can  work  together  to  their  mutual 
advantage  if  past  unfortunate  events  can  be  forgotten,  and  it  is  our 
recommendation  that  every  effort  be  made  by  the  Governments  o£ 
Ecuador  and  the  United  States  to  bring  about  the  friendly  feeling 
that  we  are  confident  can  and  should  exist  between  the  people  of 
these  two  countries,  and  that  once  established  should  result  in  devel- 
oping trade  and  intercourse  that  would  be  of  great  value  to  both. 

Respectfully  submitted. 

J.  CUEVA  GARCIA,  Chairman. 


GUATEMALA 


413 


GUATEMALA. 

GROUP  CONFERENCE  REPORT. 


Hon.  WILLIAM  G.  McADOo,  Secretary  of  the  Treasury, 

Chairman  Pan  American  Financial  Conference. 

SIR:  The  public  revenues  of  Guatemala,  which  consist  largely  of 
duties  on  imports  and  an  export  duty  on  coffee,  were  somewhat 
affected  by  the  war  by  reason  of  reduced  imports  and  exports.  The 
import  duty  on  flour  was  abolished  and  that  on  other  necessities  was 
reduced.  Steps  were  taken  to  keep  down  the  ordinary  expenditures 
of  the  Government  by  means  of  economy  in  administration  and  by 
limiting  the  expenditures  for  public  buildings  and  public  works.  At 
the  same  time  the  Government  purchased  flour  to  be  supplied  to  the 
poorer  classes  below  cost,  thereby  increasing  its  expenditures.  On 
the  whole,  the  measures  adopted  to  meet  the  situation  were  wisely 
conceived. 

While  the  European  war  at  its  outbreak  caused  a  reduction  in  the 
demand  for  coffee  and  a  consequent  fall  in  price,  yet  since  that  time 
sales  and  prices  have  been  restored  almost  to  their  normal  levels. 
The  prosperity  of  the  country  is  greatly  dependent  on  coffee,  and 
little  upon  any  other  cause  which  the  war  might  affect.  The  difficul- 
ties of  the  country  which  existed  before  the  war  are  but  slightly 
increased.  While  its  external  transactions  are  of  course  carried  on  in 
gold  and  the  duties  in  part  are  imposed  on  a  gold  basis,  yet  the 
actual  currency  of  the  country  is  paper,  consisting  of  notes  of  six 
banks  of  issue,  the  value  of  which  varies  widely,  at  present  being 
about  5  per  cent  of  its  face  value  in  gold. 

The  Republic  of  Guatemala  is  not  only  in  need  of  a  reorganization 
of  its  monetary  system,  but  the  people  of  that  country  are  in  need 
of  better  credit  facilities,  both  long  and  short  time.  By  short-time 
credit  is  meant  loans  "  from  crop  to  crop,"  that  being  the  usual 
credit  extended  in  that  country,  and  the  crops  affording  the  only 
method  of  liquidating  advances.  In  this  connection  the  following 
recommendation  was  unanimously  adopted: 

The  monetary  system  of  Guatemala  is  in  an  unsatisfactory  con- 
dition. It  would  be  necessary  to  borrow  $12,000,000  in  gold  to 
place  and  maintain  the  country  on  a  gold  standard.  It  is  the  sense 

415 


416  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

of  the  conferees  that  a  loan  of  such  proportions  is  well  within  the 
ability  of  Guatemala  to  pay,  and  can  be  raised  in  the  United  States 
if  the  Government  of  Guatemala  will  make  application  for  a  loan  in 
this  country  under  such  conditions  as  will  assure  the  payment  of  the 
principal  and  interest. 

It  is  believed  by  the  conferees  representing  the  United  States  that 
a  fund  of  $10,000,000  gold  can  be  raised  by  a  syndicate  in  the  United 
States  for  the  purpose  of  providing  Guatemala  with  the  needed  bank- 
ing facilities  and  enabling  it  to  place  and  maintain  itself  on  a  gold 
standard,  said  fund  to  be  administered  as  follows : 

The  Republic  of  Guatemala  would  grant  a  perpetual  charter  for 
the  National  Bank  of  Guatemala,  with  contract  that  it  would  not 
grant  for  50  years  any  other  bank  charter. 

It  would  have  power  to  do  all  classes  of  financing,  and  would  be 
the  sole  financial  agent  and  depositary  of  the  State. 

Capital  and  surplus  $10,000,000  gold,  weight  and  fineness,  to  be 
furnished  by  a  syndicate  of  which  the  bankers  of  Guatemala  would 
be  a  part. 

The  right  to  ^  establish  branches  throughout  the  country,  with 
obligation  to  maintain  branches  in  all  cities  of  5,000  inhabitants  or 
upward. 

It  would  loan  the  Government  on  its  bonds  $5,000,000,  for  the 
purpose  of  retiring  present  existing  issue  of  paper  money. 

It  would  be  the  sole  bank  of  issue  and  fiscal  agent  for  the  Govern- 
ment. 

It  would  be  authorized  to  issue  $2  in  currency  for  each  dollar  of 
gold  or  Government  bonds ;  currency  redeemable  in  gold  at  face  value 
on  demand. 

It  may  increase  its  capital  from  time  to  time,  all  increases  to  be 
made  in  standard  gold  at  par. 

Government  revenues  pledged  for  the  payment  of  the  interest. 

Default  of  interest  would  entitle  the  United  States  Government  to 
take  possession  of  customhouses  and  collect  revenues. 

The  conferees  representing  Guatemala  agreed  generally  with  the 
suggested  plan,  but  expressed  no  opinion  as  to  the  proportion  of 
bank  notes  to  gold  and  rejected  the  plan  of  securing  the  payment  of 
interest  in  case  of  default,  these  being  considered  by  them  to  be 
purely  matters  of  policy  to  be  determined  by  their  Government. 

A  branch  of  the  United  States  bank,  a  bank  controlled  by  United 
States  capital,  or  a  bank  closely  connected  with  a  United  States  bank 
would  be  to  the  advantage  of  direct  trade  between  Guatemala  and 
the  United  States  and  would  make  "  dollar  exchange  "  more  valuable 
and  desirable. 

Conferees  representing  the  United  States  believe  that  if  such  a 
bank  w^re  established  in  Guatemala  it  would  also  afford  such  accom- 
modations in  the  way  of  extended  credit  as  to  afford  greater  relief 
to  producers. 


GROUP   CONFERENCE   REPORTS GUATEMALA.  417 

The  following  recommendation  was  unanimously  adopted: 

We  recommend  to  the  conference  that  it  express  its  hope  that  the 
Federal  reserve  banks  may  devote  particular  attention  to  promoting 
commercial  relations  between  the  American  Republics;  and  that  by 
the  quotation  of  forward  discount  rates,  by  the  establishment  of 
bureaus  or  agencies  or  the  performance  of  such  other  appropriate 
functions  as  the  law  permits  the  Federal  reserve  system  may  exercise 
Its  potent  influence  toward  standardizing  credits  and  facilitating  the 
movement  of  imports  and  exports,  thereby  encouraging  the  invest- 
ment of  United  States  banking  and  other  capital  wherever  favorable 
opportunities  offer. 

There  are  no  governmental  divisions  of  the  country  corresponding 
to  the  States  of  the  United  States.  The  cities,  with  the  exception 
of  the  capital  city  of  Guatemala,  are  of  no  great  size.  The  city  of 
Guatemala  has  a  tramway  system  owned  by  American  capital,  which 
is  at  present  equipped  with  horse,  or  rather  mule,  cars.  There  is  a 
plan  on  foot  now  to  modernize  the  system,  but  as  it  is  owned  by  a 
large  American  syndicate  the  financing  of  the  plan,  if  carried  out, 
would  probably  be  taken  care  of.  Outside  of  the  city  of  Guatemala 
there  are  no  tramway  systems,  nor  are  any  of  the  cities  of  Guatemala 
large  enough  to  support  one.  A  number  of  the  municipalities  own 
water  works  and  markets,  which  have  been  or  are  being  paid  for  by 
taxation,  and  in  some  cases  temporary  loans  have  been  obtained  from 
the  local  banks  by  the  municipalities  to  make  payments  on  such 
public  works,  these  loans  being  repaid  out  of  the  proceeds  of  taxa- 
tion. The  municipalities  have  no  bonded  indebtedness  like  cities  in 
the  United  States,  their  debts  being  represented  by  these  short-time 
loans.  There  are  some  opportunities  for  United  States  capital  to 
finance  public  utilities  in  Guatemala.  There  is  now  under  consid- 
eration a  plan  for  constructing  a  new  sewerage  system  in  the  city  of 
Guatemala,  and  a  plan  for  constructing  an  entirely  new  system  of 
water  works  for  the  same  city.  The  estimates  for  the  former  run 
over  $1,000,000  gold  and  for  the  latter  at  least  $1,500,000  gold. 
There  are  also  possibilities  for  constructing  electric  lines  for  con- 
necting the  city  of  Guatemala  with  several  near-by  towns  and 
cities. 

The  railways  of  Guatemala  are  practically  all  owned  in  the  United 
States  and  constitute  almost  the  only  investments  in  Guatemala  of 
people  of  that  country.  Investments  of  German  capital  to  a  large 
extent,  probably  in  excess  of  50,000,000  marks,  have  been  made, 
principally  in  coffee  growing,  and  English  capital  has  been  invested 
to  a  less  extent  in  the  same. 

The  foreign  business  of  Guatemala  is  financed  principally  by 
means  of  acceptances  and  bills  of  exchange,  and  this  method  has  been 
found  satisfactory,  but  an  extension  of  such  facilities  would  be 
98257°— 15 27 


418  PAN  AMERICAN   FINANCIAL   CONFERENCE. 

greatly  to  the  advantage  of  the  country.  Warehouse  receipts  are  not 
used,  as  there  are  no  warehouses  under  public  ownership  or  regu- 
lation. 

The  foreign  trade  of  Guatemala  is  carried  on  with  the  United 
States  to  a  considerable  extent.  Coffee,  which  comprises  80  per 
cent  of  its  exports,  is  shipped  principally  to  Europe.  The  quality 
of  this  coffee  is  excellent,  and  it  brings  a  high  price  in  the  markets 
of  Europe,  and  especially  London,  where  the  finest  grade  commands 
a  very  high  price.  There  is  no  reason,  however,  why  this  coffee 
should  not  be  sold  more  extensively  to  consumers  in  the  United 
States  of  the  better  grades  of  coffee. 

Guatemala  is  a  country  of  great  natural  resources  and  a  good 
laboring  class,  and  with  intelligent  cooperation  a  number  of  articles 
used  in  this  country  might  be  produced  there. 

The  following  recommendations  were  unanimously  adopted: 

Guatemala  and  of  increasing  the  United  States  foreign  trade  with 
that  country  would  be  to  have  our  manufacturers  of  agricultural 
implements  ship  machines  for  demonstrating  purposes  to  different 
parts  of  the  country,  with  their  own  demonstrators,  and  that  the 
Government  of  Guatemala  be  requested  to  supervise  these  demon- 
strations in  instructing  the  agriculturists  of  the  country  in  proper 
methods  of  cultivating  the  land  and  using  modern  tools  and  ma- 
chinery. 

The  resources  of  Guatemala  in  valuable  woods  need  development. 
Transportation  facilities  necessary  to  bring  the  wood  in  the  rough 
to  mills  is  insufficient.  It  is  recommended  that  the  attention  of 
American  manufacturers  of  portable  sawmills  be  called  to  this,  in 
order  that  the  wood  may  be  cut  at  growth,  thus  reducing  the  ulti- 
mate cost  of  transportation  to  market.  Improved  sugar-cane  milling 
machinery  is  also  needed,  and  the  attention  of  American  manufac- 
turers of  such  machinery  is  also  directed  to  this. 

That  American  manufacturers  and  exporters  seeking  an  outlet  in 
South  and  Central  American  countries  for  commodities  intended 
for  wide  distribution  be  requested  to  put  their  wares  in  passages 
conforming  to  the  transportation  requirements  of  the  country,  so  as 
to  better  meet  the  convenience  of  the  peoples  of  those  countries  and 
popularize  American  commodities  and  manufactures. 

Over  55  per  cent  of  Guatemala's  imports  are  bought  in  the  United 
States,  and  this  amount  could  be  largely  increased  by  some  effort  on 
the  part  of  our  manufacturers  and  exporters.  The  conferees  adopted 
in  this  connection  the  following  recommendation : 

The  American  manufacturers  and  exporters  be  requested  to  estab- 
lish and  maintain  in  Guatemala  City  a  permanent  exhibition  of 
American  commodities  which  are  at  present  less  well  known  than 
European  wares. 

The  committee  reports  that  there  is  a  stable  republican  form  of 
government  in  Guatemala  by  which  the  laws  are  respected  and  en- 


GROUP  CONFERENCE   REPORTS GUATEMALA.  419 

forced,  and  that  there  has  been  no  revolutionary  movement  in  17 
years ;  that  Guatemala  has  a  good  system  of  primary  education  sup- 
ported by  the  Government,  with  1,820  schools,  and  attended  by  63  per 
cent  of  the  children  of  school  age,  there  being  an  average  of  one 
school  to  each  thousand  inhabitants ;  that  the  teaching  of  English  is 
compulsory  in  the  schools,  and  proficiency  in  this  language  is  a 
prerequisite  to  the  degree  of  bachelor  of  arts ;  that  the  public  health 
is  protected  by  a  national  board  of  health,  under  whose  direction 
epidemics  have  been  entirely  stamped  out  by  means  of  vaccination 
and  other  preventives  and  remedies. 
The  following  recommendations  were  also  adopted : 

That  the  conference  recommends  the  early  establishment  of  a  uni- 
form postal  system  between  all  of  the  countries  of  the  American 
continents. 

That  the  conference  advises  that  there  be  adopted  a  uniform  classi- 
fication of  all  articles  subject  to  customs  duties  among  the  different 
nations  of  the  American  continents. 

That  the  conference  recommends  that  American  merchants  be  re- 
quested to  grant  their  Latin- American  clients  a  credit  of  not  less  than 
00  days'  sight  for  the  payment  of  their  purchases. 

That  the  conference  recommends  the  designation  of  agents  to  Latin- 
American  countries  who  shall  know  not  only  how  to  present  their 
wares,  but  who  shall  also  pay  especial  attention  to  the  characteristics 
of  their  Latin-American  clientele,  in  order  that  its  needs  may  be 
learned  with  a  view  to  fostering  business  intercourse  with  American 
merchants. 

That  universities,  high  schools,  and  business  colleges  of  the  United 
States  be  asked  to  grant  facilities  to  young  men  chosen  from  amongst 
the  most  promising  in  Latin- American  schools  of  secondary  instruc- 
tion, or  from  the  graduates  of  colleges,  so  that  they  may  be  sent  to 
study  business  courses,  political  economy,  finance,  and  other  branches 
connected  with  or  related  thereto.  These  students  on  the  conclusion 
of  their  courses  in  the  United  States  to  return  to  their  respective 
countries  in  order  that  the  ideas,  experience,  and  knowledge  they 
have  acquired  may  be  utilized. 

That  Latin- American  countries  be  urged  to  devote  attention  to 
the  study  of  political  economy,  business  courses,  finance,  etc.,  in- 
creasing the  scope  of  the  said  studies  and  making  them  compulsory 
in  universities  and  colleges,  the  rudiments  to  be  imparted  in  primary 
and  high  schools. 

That  the  respective  Governments  afford  the  necessary  facilities  for 
an  interchange  of  professors  and  students  from  the  countries  of  the 
three  Americas,  with  a  view  to  furthering  their  mutual  acquaintance 
and  increasing  scientific  intercourse  in  commerce,  banking,  etc. 
These  professors  would  devote  themselves  to  the  diffusion  of  these 
ideas  by  means  of  lectures,  preferably. 

That  Spanish  be  taught  in  all  schools,  colleges,  and  universities  in 
the  United  States,  in  order  that  a  greater  number  of  men,  competent 
to  develop  the  commercial  intercourse  of  Latin  America,  may  be 
trained. 


420  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

That  greater  attention  be  paid  to  the  study  of  the  geography,  his- 
tory, and  general  conditions  of  Latin- American  countries,  so  that  a 
clearer  conception  of  their  resources  may  be  gained. 

That  chambers  of  commerce  be  established  throughout  the  coun- 
tries of  this  continent,  which,  owing  to  their  peculiar  knowledge  of  the 
banking  and  business  conditions,  are  in  a  position  to  furnish  all  data 
regarding  business  and  industrial  conditions  to  persons  soliciting 
such. 

That,  so  far  as  possible,  steps  be  taken  to  improve  means  of  trans- 
portation along  the  Pacific  coast,  and  that  vessels  stop  at  all  im- 
portant ports,  both  in  Latin  America  and  the  United  States ;  and  if 
private  enterprise  fail  to  provide  the  necessary  means  of  marine 
transportation  for  interchange  of  the  field  and  factory  products  of 
the  United  States  and  Central  American  countries,  the  respective 
Governments  aid  in  providing  such  necessary  marine  transportation. 

The  appointment,  in  addition  to  the  committee  named  to  carry  out 
the  resolutions  adopted  by  the  conference,  of  the  members  of  each 
delegation  as  a  consulting  committee  of  each  country,  so  that  all  sub- 
sequent data  on  finance  to  be  published  later  by  the  respective  coun- 
tries may  be  given  these  committees,  and  in  order  that  should  the 
central  committee  deem  it  wise  the  various  matters  be  referred  to 
the  different  countries. 

In  the  belief  that  a  larger  comity  between  Guatemala  and  the 
United  States  can  be  greatly  enhanced  by  an  improved  banking  sys- 
tem in  the  former  country,  and  that  the  cordial  cooperation  shown 
in  the  Guatemala  group  conference  by  the  representatives  of  the 
two  Governments  in  the  discussion  of  some  banking  system  of  mutual 
interest  to  the  two  Governments  can  lead  to  the  establishment  in 
Guatemala  of  such  a  banking  system,  after  due  and  adequate  study 
of  local  conditions  by  some  representative  from  the  United  State's 
now  in  attendance  upon  the  Guatemala  group  conference,  it  is  the 
sense  of  this  conference  that  Hon.  David  R.  Francis,  of  St.  Louis, 
Mo.,  be  requested  by  the  Government  of  the  United  States  to  visit 
Guatemala  for  this  purpose  as  honorary  commissioner;  and  acting 
further  in  cooperation  with  Dr.  Victor  Sanchez  Ocana,  Dr.  Carlos 
Herrera,  and  Dr.  Juan  S.  Lara,  of  the  Guatemalan  delegation,  that 
he  be  requested  to  report  to  his  Government  such  information  as  may 
permit  speedy  and  fruitful  results  through  the  establishment  in 
Guatemala  by  American  financial  aid  of  banking  facilities  adequate 
to  the  mutual  needs  of  the  two  countries. 

Respectfully  submitted. 

VICTOR  SANCHEZ  OCANA,  Chairman. 


HONDURAS 


421 


HONDURAS. 


GROUP  CONFERENCE  REPORT. 


Hon.  WILLIAM  G.  McADOO,  Secretary  of  the  Treasury, 

Chairman  Pan  American  Financial  Conference. 
SIR  :  The  delegates  from  Honduras,  at  the  suggestion  of  the  dele- 
gates from  the  United  States,  prepared  a  report  as  to  the  conditions 
in  and  the  needs  of  Honduras,  following  in  their  report  the  recom- 
mendations of  the  honorable  Secretary  of  the  Treasury  as  to  the  sub- 
jects to  be  considered  by  the  different  group  committees.  Your  con- 
ference committee  has  therefore  interwoven  with  portions  of  this 
very  comprehensive  report  of  the  Honduras  delegates  its  recom- 
mendations for  the  consideration  of  the  financial  conference,  and  has 
the  honor,  therefore,  to  report  the  following  outline  of  conditions 
at  present  existing  in  Honduras,  with  suggestions  for  the  develop- 
ment of  the  natural  resources  of  that  country  which  might  prove  to 
the  mutual  advantage  of  Honduras  and  the  United  States  if  these 
could  be  brought  about  by  cooperation. 

I.  PUBLIC  FINANCE. 

(a)  Public  revenues   and  expenditures   as   affected  by   recent 

events  in  Europe. 

(b)  Measures  adopted  to  meet  the  situation. 

(c)  Proposed  remedies. 

(d)  Possibilities  of  international  cooperation. 

The  condition  of  the  internal  public  finances  of  Honduras  at  the 
beginning  of  the  European  war  was  a  very  favorable  one.  Due  to 
the  efficient  collection  of  fiscal  resources  the  actual  were  larger  than 
the  estimated  receipts  and  far  greater  than  the  actual  expenditure. 
The  Government  applied  large  amounts  of  the  surplus  for  the  repair 
of  the  cart  road  leading  from  the  capital  to  the  south  coast  and  the 
port  of  Amapala  and  to  the  improvement  of  the  roadbed  and  the 
changing  of  rolling  stock  of  the  railroad  from  La  Pimienta  to 
Puerto  Cortez,  on  the  Atlantic  coast  of  Honduras.  Furthermore, 
it  started  works  for  the  supplying  of  places  of  recreation  and  the 
beautifying  of  the  capital  of  the  Republic. 

423 


424  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

The  prolonged  drought  of  the  past  two  years  resulted  in  short  crops 
and  has  affected  the  towns  of  the  center  and  south  of  the  Kepublic. 
This  has  been  a  calamity  perhaps  greater  for  Honduras  than  the  Eu- 
ropean war,  and  the  Government,  in  order  to  forestall  a  deficiency  in 
its  budget  and  avoid  the  raising  of  additional  taxes  from  new 
sources,  has  imposed  upon  itself  rigorous  economies  in  its  expendi- 
tures, excepting  those  absolutely  necessary  for  the  proper  public  ad- 
ministration. 

II.    THE   MONETARY  SITUATION. 

(a)  Condition  prior  to  outbreak  of  the  European  war. 

(&)  Effects  of  the  war. 

(c)  Possibilities  of  international  cooperation. 

(d)  Outlook  for  uniform  monetary  standards. 

The  silver  peso,  25  grams,  900  fine  (approximate  present  value  36.15 
cents  in  gold)  is  the  monetary  standard,  and  this  circulating  medium 
is  abundant  on  the  market.  It  is  supplemented  by  the  notes  of  private 
bankers.  There  is  some  scarcity  of  bank  notes,  necessitating  transfer 
from  town  to  town,  but  as  this  monetary  question  is  purely  an  in- 
ternal one,  we  do  not  think  it  necessary  to  consider  it  here. 

III.    THE  PRESENT  BANKING   SITUATION. 

(a)  Conditions  existing  prior  and  subsequent  to  the  outbreak  of 

the  European  war. 

(&)  The  establishment  of  branch  banks  and  direct  exchange. 
(<?)  Possibilities  of  further  international  cooperation. 

The  banks  of  Honduras  are  the  Banco  de  Honduras  and  the  Banco 
de  Comercio  at  the  capital  and  the  Banco  Atlantida  at  Ceiba,  on  the 
Atlantic  coast. 

The  operations  of  these  banks  are  confined  to  mortgages  and  short- 
time  loans,  at  rates  of  interest  of  from  10  to  12  per  cent  per  annum, 
and  to  a  small  extent  to  the  sale  and  purchase  of  exchange  on  foreign 
countries. 

While  commercial  intercourse  between  Honduras  and  the  United 
States  could  be  benefited  by  the  investment  of  American  capital  in 
local  banking  institutions  and  the  establishment  of  branches  by 
United  States  banks  as  now  authorized  under  the  Federal  banking 
laws,  we  do  not  think  this  step  immediately  necessary,  for  we  are  of 
the  opinion  that  if  the  banks  now  located  in  Honduras  will  make  the 
effort  satisfactory  credits  can  be  established  with  banks  in  the  United 
States  to  adequately  handle  the  business  carried  on  between  the  two 
countries. 

The  establishment  of  the  gold  standard  in  Honduras  would  be  a 
very  desirable  reform.  It  is  not  probable  that  this  could  be  carried 


GROUP   CONFERENCE   REPORTS HONDURAS.  425 

out  until  the  country's  external  debt,  now  in  default,  has  been  ad- 
justed. We  would,  however,  recommend  a  careful  study  by  the  Hon- 
duras authorities  of  the  Argentine  conversion  law,  No.  3871,  of 
November  4,  1899,  eminently  successful  in  that  country  after  actual 
experience.  This  law  had  the  effect  of  giving  the  country  a  prac- 
tical, stable  paper  currency  many  years  before  it  had  accumulated 
sufficient  gold  to  make  actual  conversion  of  the  currency  possible. 

IY.    THE  FINANCING  OF  PUBLIC  IMPROVEMENTS. 

(a)  The  underwriting  of  national  loans. 

(5)  The  underwriting  of  provincial  or  State  loans. 

(<?)   The  underwriting  of  municipal  loans. 

(d)  The  relation  of  public  credit  to  a  well-organized  system  of 

taxation  and  balanced  budget. 

According  to  the  message  of  the  President  to  Congress  in  the  pres- 
ent year  the  interior  debt  of  the  Republic  amounted,  on  July  31, 
1914,  to  4,G11,4G4.68  pesos.  This  debt  has  accumulated  from  old  loans 
made  to  the  Government  for  deferred  payments  and  from  losses 
caused  by  revolutions.  The  annual  budget  of  expenditures  sets  aside 
each  year  a  large  sum  for  the  amortization  of  this  debt,  and  the  sur- 
plus over  expenditures  has  also  been  applied  to  the  extinction  of  the 
interior  debt.  In  the  last  fiscal  year  the  debt  was  reduced  from 
5,747,743.51  pesos  to  the  figure  mentioned  above. 

Data  submitted  to  this  committee  indicates  that  the  surplus  reve- 
nues of  the  Republic  have  been  devoted  for  two  successive  years  to 
the  reduction  of  the  country's  internal  debt,  the  reduction  effected 
the  last  fiscal  year,  ending  July  31,  amounting  to  over  1*1,000,000,  or 
nearly  20  per  cent  of  the  total  internal  debt. 

There  is  a  heavy  external  debt  weighing  upon  the  credit  of  the 
Republic.  This  consists  principally  of  bonds  issued  for  the  con- 
struction of  the  railway  from  Puerto  Cortez  to  La  Pimienta  and 
the  arrears  of  interest  thereon.  The  British  Council  for  Foreign 
Bondholders  represents  the  holders  of  these  bonds. 

For  details  covering  the  external  debt  of  Honduras  we  would 
refer  to  the  volume  entitled  "  Morgan-Honduras  Loan,"  by  Juan  E. 
Paredes  (on  file  in  the  Pan  American  Union  Library,  Washington), 
also  to  "  The  Railways  of  South  and  Central  America,"  by  Halsey, 
1914  edition. 

However,  transportation  is  one  of  the  first  essentials  to  the  de- 
velopment of  Honduras,  and  while  the  natural  resources  offer  an 
encouraging  basis  to  start  from,  yet  the  present  condition  of  the 
country's  foreign  debt  and  limited  income  makes  it  of  prime 
importance  that  they  determine  first  what  settlement  can  be  made 
with  the  holders  of  the  mortgage  bonds  on  the  railroad  built  from 


426  PAN   AMERICAN   FINANCIAL   CONFEEENCE. 

Puerto  Cortez  to  La  Pimienta  before  negotiations  are  entered  into 
looking  to  the  interesting  of  foreign  capital. 

At  present  a  surcharge  amounting  to  5  per  cent  in  gold  is  imposed 
upon  all  importations  in  excess  of  existing  duties  collected  in  silver. 
The  delegates  representing  the  Government  of  Honduras  indicate 
that  if  necessary  this  surcharge  could  be  increased  to  10  per  cent, 
and  the  amount  of  revenues  thereby  produced  applied  toward 
amortizing  the  amount  of  external  loan  required  for  adjustment  of 
the  existing  defaulted  external  debt. 

They  also  state  that  the  Government  at  present  collects  a  tax  of  3 
centavos  silver  export  duty  levied  upon  each  bunch  of  bananas  ex- 
ported, or  the  equivalent  of  1J  cents  gold.  It  is  suggested  that  this 
export  tax  could  be  increased  to  gross  2  cents  gold  per  bunch,  and  the 
proceeds  thereof  likewise  applied  toward  amortizing  the  external 
loan.  These  duties  could,  if  necessary,  be  collected  under  supervision 
of  nominees  of  the  bondholders  or  be  deposited  as  directed  by  them. 

The  total  amount  of  revenues  from  these  sources  it  is  estimated 
would  be  $410,000  gold  per  annum.  The  delegates  indicate  that  the 
Government  would  guarantee  a  minimum  of  $400,000  from  these 
sources  for  the  discharge  of  an  external  debt,  and  that  the  total 
amount  so  collected  would  be  applied  to  that  purpose. 

V.    THE    FINANCING    OF    PRIVATE    ENTERPRISES. 

(a)  The  present  needs  of  public-service  companies,  such  as  rail- 
roads, electric  light,  gas,  and  power  companies. 
(5)  The  needs  of  merchants  and  manufacturers. 

(c)  The  financing  of  seasonable  crops. 

(d)  The  consideration  of  plans  to  secure  a  more  satisfactory 

status  for  collateral  as  security  for  commodity  loans. 

(e)  The  possibility  of  securing  greater  uniformity  in  laws  relat- 

ing to  trade  and  commerce,  in  custom  regulations,  and  the 
more  effective  protection  of  trade-marks. 

As  to  "5,  <?,  and  d"  all  of  these  have  been  covered  in  previous 
paragraphs  of  this  report. 

(a)  With  reference  to  the  present  needs  of  public-service  com- 
panies, the  railroad  enterprises  established  at  the  Atlantic  coast  of 
Honduras,  which  are  those  of  Vacarro  Bros.  &  Co.'s  railroad  at 
Ceiba  and  the  Tela  Railroad  Co.  at  Tela,  both  located  in  the  Depart- 
ment of  Atlantida,  and  the  Trujillo  Railroad  at  Trujillo,  Department 
of  Colon,  are  all  enjoying  ample  franchises.  The  importation  of  the 
material  for  the  construction  and  conservation  of  the  railroads  is 
exempt  from  all  fiscal  and  municipal  duties  or  taxes  and  extensive 
land  grants  and  other  valuable  concessions  have  been  given  to  these 
companies. 


GROUP   CONFERENCE   REPORTS HONDURAS.  427 

At  present  there  are  no  gas  companies  nor  street  railways  in  the 
Republic,  and  electric  lighting  undertakings  exist  only  in  Teguci- 
galpa, San  Pedro  Sula,  and  Ceiba.  Electric  lighting  has  been  pro- 
posed for  other  cities,  but  has  not  yet  been  carried  out.  We  think 
that  these  public  utilities  will  be  provided  for  by  local  or  foreign 
capital  after  the  country  has  begun  to  show  the  development  ex- 
pected from  the  completion  of  the  railway  to  Tegucigalpa. 

We  recommend  that  the  questions  of  laws  and  regulations  govern 
ing  trade-marks,  banking,  securities,  commercial  contracts,  negotiable 
instruments,  and  also  the  dispatch  of  goods  through  the  customhouse 
should  be  left  to  the  general  committee  on  uniformity  of  laws.  We 
would,  however,  suggest  the  importance  of  giving  due  consideration 
to  administrative  regulations  affecting  all  of  these  matters,  particu- 
larly customhouse  procedure,  as  well  as  to  the  actual  statutes,  as  it  is 
usually  the  great  variation  in  port  and  customhouse  regulations 
which  makes  importation  and  exportation  complicated. 

The  Honduras  Government  would  gladly  cooperate  with  other 
Latin  American  countries  in  adopting  uniform  laws  and  regulations. 

The  principal  sources  of  Government  revenue  are  the  import  and 
export  duties  and  the  Government  monopoly  of  rum  made  from 
sugar  cane.  The  Government  has  a  monopoly  on  the  selling  of  pow- 
der, but  this  is  purely  for  the  purpose  of  controlling  the  sale  for 
reasons  of  public  safety. 

VI.  EXTENSION  or  INTER-AMERICAN  MARKETS. 

(a)  Long-term  credits  as  a  means  of  stimulating  inter- American 

trade. 
(£)  Acceptances  and  discounts  (including  warehouse  receipts) 

as  a  means  of  extending  inter- American  trade. 
((?)  The  establishment  of  direct  exchange  (often  referred  to  as 

dollar  exchange)  as  a  means  of  extending  American  trade. 

(d)  The  adaptation  of  the  manufactured  products  of  the  United 

States  to  the  needs  of  the  nations  of  Central  and  South 
America. 

(e)  Tariff  laws  as  affecting  trade  with  the  United  States. 

Commerce  with  the  United  States  would  be  materially  increased 
if  the  merchants  and  manufacturers  of  North  America  will  make  a 
careful  study  of  the  mercantile  needs  of  Honduras  and  conform  with 
the  wishes  of  the  buyers  as  to  the  style  of  wares  offered  and  methods 
of  packing.  Proper  packing  is  most  essential  in  order  to  meet  the 
duty  exactions  as  well  as  to  insure  safe  delivery  when  merchandise 
is  consigned  to  parts  of  the  country  where  transportation  is  difficult. 


428  PAN  AMERICAN   FINANCIAL   CONFERENCE. 

While  price  is  the  chief  consideration  in  relation  to  merchandise 
shipped  to  the  coast  region,  it  is  very  necessary  to  grant  long-term 
credits  (three  to  six  months)  to  merchants  in  the  interior  who  are 
subject  to  long  delays  in  the  receipt  of  their  merchandise.  It  is  our 
opinion  that  this  can  be  covered  by  commercial  letters  of  credit  with 
the  banks  of  the  United  States. 

The  exportation  of  cattle  from  Honduras  would  be  a  most  valu- 
able aid  to  the  country  by  increasing  their  export  trade  about  $1,000,- 
000.  At  the  present  time  stringent  quarantine  regulations  of  the 
United  States  prevent  this  importation,  due  to  the  existence  of  wood 
tick.  Inasmuch  as  it  is  felt  that  the  establishment  of  dipping  vats  at 
the  point  of  embarkation  would  eradicate  this  evil,  it  is  strongly 
urged  by  this  committee  that  this  matter  be  properly  brought  to  the 
attention  of  the  health  authorities  of  the  United  States,  with  a  view 
of  aiding  the  Honduran  exporters  of  cattle. 

VII.  MERCHANT  MARINE  AND  IMPROVED  TRANSPORTATION  FACILITIES. 

(a)  Increased  and  improved  ocean  transportation  facilities. 

1.  The  present  needs  in  this  respect. 

2.  Statement  of  shipping  facilities  now  enjoyed. 

3.  Suggestion  as  to  the  best  means  of  securing  improved 

transportation  service. 

4.  What  public  or  private  encouragement  for  improved 

transportation  facilities  can  be  expected  from  the 
countries  represented  at  the  conference? 

(&)  Improved  postal  facilities   (including  money  orders)    and 
parcel  post. 

The  improvement  of  ocean  transportation  facilities  is  of  great 
importance.  The  only  line  of  steamships  at  present  serving  the 
Pacific  coast  of  Honduras  is  the  Pacific  Mail  Steamship  Co.  We  be- 
lieve that  the  development  expected  from  the  completion  of  the  rail- 
way to  Tegucigalpa  will  necessitate  the  provision  of  better  steamship 
facilities. 

The  Government  of  Honduras  would  give  liberal  subventions  to  a 
company  that  would  obligate  itself  to  send  its  steamers  to  Amapala 
at  least  every  ten  days,  such  a  service  to  extend  as  far  as  Balboa  on 
the  south  and  San  Francisco  on  the  north. 

The  internal  postal  service,  including  that  for  money  orders  and 
parcels  or  parcel  post,  is  completely  attended  to  in  Honduras,  and 
this  postal  service  has  been  improved  on  the  south  coast  route.  The 
mail  is  carried  on  motor  trucks,  for  which  contracts  for  the  carrying 
of  this  mail  have  been  let  by  the  Government. 

In  conclusion,  we  beg  to  emphasize  the  suggestion  already  voiced 
by  the  Argentine  delegation  for  the  establishment  of  a  permanent 
Pan  American  board  of  arbitration.  The  purpose  and  power  of  such 


GROUP   CONFERENCE   REPORTS HONDURAS.  429 

a  board  must  enable  it  to  act  with  full  authority  as  mediator  and  final 
court  in  the  settlement  of  all  commercial  disputes  that  may  arise  be- 
tween the  citizens  of  any  country  and  the  Government  of  another, 
or  between  citizens  of  two  countries.  Adequate  executive  authority 
must  be  provided  for  the  enforcement  of  the  decisions  of  this  board 
of  arbitration.  In  our  judgment  nothing  will  do  more  to  stabilize 
credits,  encourage  the  investment  of  foreign  capital,  and  stimulate 
the  desire  for  cooperation  between  the  Pan  American  countries  than 
the  carrying  out  of  the  Argentine  proposal. 

The  undersigned  committee  unanimously  submits  this  report  to 
the  Pan  American  Financial  Conference  and  recommends  that  it  be 
referred  for  further  consideration  and  action  to  whatever  body  is 
created  for  the  purpose  of  giving  effect  to  the  proceedings  of  this 
conference. 

Kespectf ully  submitted. 

LEOPOLDO  CORDOVA,  Chairman. 


NICARAGUA 


431 


NICARAGUA. 


GROUP  CONFERENCE  COMMITTEE  REPORT. 

Hon.  WILLIAM  G.  McAooo,  Secretary  of  the  Treasury, 

Chairman  Pan  American  Financial  Conference. 
SIR:  After  careful  consideration  of  the  explanation  of  existing 
conditions  in  the  Eepublic  of  Nicaragua  with  reference  to  transpor- 
tation, banking,  indebtedness,  and  resources,  as  submitted  by  the 
chairman,  Dr.  Pedro  Eafel  Cuadra,  and  fully  confirmed  by  Gen. 
Emiliano  Chamorro,  Minister  from  Nicaragua  to  the  United  States, 
Mr.  Clifford  D.  Ham,  Collector  General  of  Customs  of  Nicaragua, 
and  the  Hon.  Arthur  R.  Thompson,  a  member  of  the  Nicaraguan 
Mixed  Claims  Commission,  and  from  other  well-informed  sources, 
the  committee  arrived  at  the  following  conclusions,  which  it  desires 
to  submit  as  its  report  to  the  General  Conference :  - 

1.  That  the  present  Government  of  the  Republic  of  Nicaragua  is 
stable  in  character  and  is  being  patriotically  administered  with  due 
regard  for  the  welfare  of  its  citizens  and  the  upbuilding  and  develop- 
ment of  the  country,  affording  at  the  same  time  proper  protection  for 
life  and  property  and  for  the  investment  of  outside  capital. 

2.  That  the  natural  resources  of  Nicaragua  are  almost  unlimited 
in  extent  and  of  the  greatest  diversity,  due  to  the  variety  of  soil,  cli- 
mate, and  altitude.    The  lands  in  the  various  sections  are  adapted  to 
the  cultivation  of  coffee,  cacao,  bananas,  coconuts,  pineapples  and 
citrus  fruits,  tobacco,  sugar,  cotton,  and  rubber,  the  success  of  which 
has  been  practically  demonstrated,  but  in  a  crude  and  limited  man- 
ner, and  which,  with  adequate  transportation  facilities,  can  readily 
attain  increased  proportions  and  find  ready  markets  at  home,  in  ad- 
jacent, and  in  foreign  countries. 

3.  Vast  areas  are  especially  adapted  to  the  raising  of  cattle  and 
other  varieties  of  live  stock,  being  covered  throughout  the  year  with 
natural  grasses  of  remarkably  high  food  value,  well  watered  by 
perennial  streams,  and  now  supporting  large  herds  of  cattle,  but 
which  industry  likewise  suffers  for  transportation  and  marketing 
facilities. 

4.  Nicaragua  geologically  is  analogous  to  the  State  of  Nevada, 
and  a  large  portion  of  the  mountainous  section  is  highly  mineralized, 
producing  both  gold  and  silver  in  paying  quantities,  though  operated 
at  this  .time  in  the  crudest  possible  manner  and  under  extraordinary 
difficulties  of  transportation. 

5.  An  extensive  area  is  heavily  wooded  with  primeval  forests  of 
mahogany,  cedar,  and  other  valuable  hardwoods,  pine,  and  dye- 
woods,  but  this  industry  is  so  little  developed  that  merchantable 

98257°— 15 28  433 


434  PAN  AMERICAN   FINANCIAL   CONFERENCE. 

lumber  is  actually  imported  into  portions  of  the  country  from  the 
Gulf  ports  of  the  United  States.  All  of  these  natural  resources  are 
suffering  primarily  from  insufficient  capital  necessary  to  their 
proper  development  and  from  lack  of  adequate  transportation  fa- 
cilities, both  from  the  interior  to  the  ports  and  from  the  ports  to  the 
outside  markets  of  the  world.  The  need  of  additional  transportation 
facilities  is  emphasized  by  the  fact  that  inhabitants  of  the  one 
coast  are  under  the  necessity  of  importing  articles  from  the  United 
States  and  other  countries  which  are  produced  by  and  exported 
from  the  other  coast,  though  the  two  are  only  separated  by  a  dis- 
tance of  approximately  200  miles.  In  view  of  the  impera- 
tive necessity  of  improved  shipping  facilities,  more  acutely  felt  in 
Nicaragua  than  in  most  other  countries,  the  transportation  commit- 
tee of  this  conference  is  urgently  requested  to  give  due  consideration 
to  the  needs  of  Nicaragua  in  this  respect  in  conjunction  with  similar 
requirements  of  the  other  American  Republics. 

From  all  of  the  foregoing  it  is  evident  that  the  Republic  of  Nica- 
ragua affords  to  capital  extraordinary  opportunities  for  profitable 
investment,  both  upon  a  large  and  small  scale,  and  in  view  of  the 
growing  sentiment  prevailing  in  the  United  States  in  favor  of  the 
cultivation  of  more  intimate  commercial  and  financial  relations 
with  all  of  the  Republics  of  the  Western  Hemisphere,  it  is  reasonable 
to  expect  that  such  capital  can  be  secured.  In  this  connection  the 
committee  has  received  full  information  concerning  the  proposed 
treaty  between  the  Republic  of  Nicaragua  and  the  United  States, 
and  it  believes  that  the  ratification  of  this  treaty  will  inure  to  the 
decided  advantage  of  both  countries  parties  thereto,  not  only  in  aid- 
ing the  development  of  Nicaragua,  but  in  encouraging  the  invest- 
ment of  capital  therein  by  insuring  a  continuation  of  present  stable 
and  peaceful  conditions. 

Appreciating  the  desirability  of  providing  additional  banking 
facilities,  having  American  affiliations,  not  only  in  Central  and  South 
America,  but  in  all  of  the  countries  with  which  we  desire  to  promote 
more  intimate  commercial  relations,  it  is  recommended  that  the 
national  banking  laws  of  the  United  States  be  so  amended  as  to 
permit  national  banks  to  subscribe  to  the  stock  of  banks  organized  to 
do  business  in  other  countries  up  to  a  certain  limited  specified  amount, 
thereby  enabling  banks,  particularly  those  having  less  than  $1,000,000 
of  capital,  to  become  interested  in  foreign  banks. 

This  committee  acknowledges  its  high  appreciation  of  the  natural 
and  potential  possibilities  of  Nicaragua,  and  recommends  most 
earnestly  the  prompt  and  full  cooperation  of  the  people  of  the 
United  States  in  developing  the  resources  of  our  sister  Republic, 
lying  as  it  does  in  close  proximity  to  our  Gulf  ports  and  immedi- 
ately adjacent  to  the  great  Panama  Canal,  to  the  mutual  benefit  of 
the  people  of  both  countries. 

Respectfully  submitted. 

PEDRO  RAFAEL  CUADRA,  Chairman. 


/ 
PANAMA 


435 


PANAMA. 


GROUP  CONFERENCE  REPORT. 


Hon.  WILLIAM  G.  McADOO,  Secretary  of  the  Treasury, 

Chairman  Pan  American  Financial  Conference. 
SIR  :  Your  committee  makes  the  following  suggestions : 

1.  In  regard  to  the  commissaries  established  in  the  Canal  Zone: 

(a)  Provide  that  the  coupon  books  now  issued  by  the  Panama 
Canal  or  the  Panama  Railroad  Co.  to  employees  and  servants  of  the 
United  States  Government  or  Panama  Railroad  may  be  used  to 
purchase  commodities  from  the  merchants  and  manufacturers  en- 
gaged in  business  in  the  Republic  of  Panama  and  the  Canal  Zone  and 
be  redeemable  in  cash  at  par,  when  presented  by  any  duly  estab- 
lished bank,  merchant,  or  dealer  in  the  Republic  of  Panama  or  the 
Canal  Zone. 

(b)  Abolish  the  established  practice  of  commissaries  owned  di- 
rectly or  indirectly  by  the  United  States  in  selling  to  ships  which 
call  at  the  ports  of  or  pass  through  the  Panama  Canal  all  classes  of 
provisions   and   supplies,   excepting   coal,   oil,   water,   cold-storage 
goods,  and  other  supplies  or  services  not  procurable  in  the  Republic 
of  Panama  or  the  Canal  Zone :  Provided,  however,  That  this  regula- 
tion shall  not  apply  to  ships  owned  by  the  Government  of  the  United 
States. 

2.  In  regard  to  transportation : 

(a)  Respectfully  request  that  the  discriminatory  freight  rates  by 
sea  and  land  established  by  the  Panama  Railroad  Co.  to  the  detri- 
ment of  commercial  interests  in  the  Republic  of  Panama  be  abolished. 

(b)  To  permit  the  use  of  the  canal,  subject  to  canal  regulations 
and  tolls,  to  merchant  ships  or  other  vessels  desiring  to  use  it  for 
transportation  purposes  between  the  ports  of  Panama  and  Colon. 

BANKING. 

We  earnestly  recommend  to  the  Federal  Reserve  Board  to  issue 
an  order  permitting  each  of  the  Federal  reserve  banks  in  the  Federal 
Reserve  System  to  open  branch  banks  in  North,  South,  and  Central 
America  (outside  the  United  States)  whenever  the  management  of 
the  respective  Federal  reserve  banks  feel  warranted  to  do  so. 

437 


438  PAN  AMERICAN   FINANCIAL  CONFERENCE. 

SHIPPING   FACILITIES. 

Recognizing,  as  we  do,  that  clearer  understanding,  mutual  interest, 
and  better  trade  can  be  accomplished  only  by  adequate  means  of 
communication,  we  believe  that  better  shipping  facilities  between 
North,  Central,  and  South  America  should  be  developed  and  that 
any  present  legal  obstacles  to  this  end  should  be  withdrawn. 

Believing  that  the  best  way  to  create  a  market  for  any  commodity 
is  to  trade  in  it,  we  recommend  that  this  conference  strongly  urge 
that  all  merchants  in  the  United  States  selling  goods  in  Central  or 
South  America  quote  prices  and  draw  their  covering  drafts  in 
United  States  of  North  America  dollars,  and  that  all  banks  and 
bankers  issuing  commercial  credits  or  selling  exchange  on  these 
countries  employ  the  same  medium,  so  far  as  practicable. 

Respectfully  submitted. 

ARISTIDES  ARJONA,  Chairman. 


PARAGUAY 


439 


PARAGUAY. 

GROUP  CONFERENCE  REPORT. 

Hon.  WILLIAM  G.  McADoo,  Secretary  of  the  Treasury, 

Chairman  Pan  American  Financial  Conference. 

SIR  :  The  group  committee  appointed  to  consider  the  financial  and 
commercial  conditions  in  Paraguay  begs  to  make  the  following 
report : 

The  revenues  of  Paraguay  have  been  considerably  diminished  by 
reason  of  the  war  and  that  in  consequence  thereof  the  Government 
has  taken  stringent  measures  to  reduce  its  budget  by  the  suspension 
of  divers  public  improvements  and  by  other  economies  until  more 
favorable  circumstances  develop. 

In  respect  to  the  internal  money  situation,  we  understand  that 
the  paper  money  has  largely  depreciated  in  value,  and  the  supply 
of  gold  is  very  limited.  We  believe  that  the  adoption  of  a  uniform 
money  standard  for  all  of  the  American  Republics  would  result  in 
stabilizing  the  currency  of  the  different  countries  and  facilitating 
international  banking  and  commercial  transactions. 

In  respect  to  the  local  banking  facilities,  we  believe  that  the  grad- 
ual establishment  of  branches  by  banks  of  the  United  States  in  south- 
ern Republics  would  strengthen  and  increase  commercial  dealings 
between  the  United  States  and  the  different  countries,  although  at 
present  in  Paraguay  there  may  not  be  sufficient  business  to  justify 
such  branch  banks  at  this  time ;  but  the  extension  of  American  mar- 
kets and  the  establishment  of  dollar  exchange  between  the  Americas 
can  be  greatly  promoted,  in  our  opinion,  by  a  gradual  establishment 
of  adequate  banking  facilities  by  the  banks  of  the  United  States  in 
Central  and  South  American  countries. 

The  steady  development  of  Paraguay's  resources  requires  foreign 
capital  which,  at  least  while  the  European  war  continues,  is  not  ob- 
tainable in  the  European  money  market.  It  is  apparent  that  judi- 
cious investment  of  United  States  capital  would  be  a  powerful  aid  to 
the  export  of  United  States  products  by  expanding  the  wealth  and 
purchasing  power  of  Paraguay. 

441 


442  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

In  the  promotion  of  trade  with,  the  southern  Republics,  the  estab- 
lishment of  a  system  of  obtaining  information  regarding  the  financial 
and  business  standing  of  the  merchants  of  those  countries  would  be 
very  helpful  and  soon  lead  to  the  extension  of  suitable  credit  terms  to 
said  merchants.  We  also  believe  that  the  establishment  of  some  sys- 
tem of  arbitration  of  commercial  disputes  between  all  of  the  countries 
of  America  would  strengthen  and  increase  international  trade  and 
mutual  understanding,  and  we  are  led  to  believe  that  Paraguay  will 
be  glad  to  cooperate  with  the  other  Central  and  South  American 
countries  and  with  the  United  States  in  bringing  about  the  estab- 
lishment of  such  a  system. 

In  respect  to  merchant  marine  and  improved  transportation  facili- 
ties between  the  Americas,  we  believe  that  this  subject  overshadows 
all  others  in  its  importance,  and  it  is  the  sense  of  this  committee 
that  adequate  transportation  facilities  are  highly  essential  in  the 
social  and  commercial  intercourse  between  the  peoples  of  Paraguay 
and  other  American  Republics.  We  hope  and  believe  that  the  com- 
mittee on  transportation  appointed  by  the  honorable  chairman  of 
the  conference  will  satisfactorily  solve  the  problem. 

From  the  information  received  and  investigations  made  we  feel 
Paraguay  has  great  possibilities  and  that  in  the  future  considerable 
trade  might  be  developed  between  this  country  and  the  United 
States.  It  has  unlimited  mineral,  timber,  and  agricultural  resources 
hardly  touched,  and  the  development  of  these  resources  in  the  future 
will  bring  about  splendid  opportunity  for  the  interchange  of  the 
products  of  the  United  States  and  this  growing  country  of  South 
America.  And  we  recommend  that  the  members  of  this  group  com- 
mittee from  the  United  States  as  well  as  the  members  from  Para- 
guay use  their  best  efforts  in  disseminating  the  information  they 
have  received  in  regard  to  Paraguay  and  the  United  States  through- 
out the  various  parts  of  their  respective  countries  looking  to  in- 
creased trade  between  the  United  States  and  Paraguay. 

We  also  wish  to  express  our  sincere  appreciation  of  the  invitation 
given  by  Secretary  of  the  Treasury  McAdoo  to  the  business  men 
and  bankers  of  the  United  States  to  come  in  touch  with  the  delegates 
from  the  Central  and  South  American  countries,  looking  to  the  pro- 
motion of  closer  relationships  between  these  countries  and  the  devel- 
opment of  our  international  commerce.  We  hope  and  believe  that 
this  conference  will  result  in  much  good  to  all  the  countries  repre- 
sented at  the  conference,  and  we  feel  that  it  will  bring  about  closer 
friendships  and  commercial  relationships  between  all  the  American 
Republics. 

Respectfully  submitted. 

H.  VELAZQUEZ,  Chairman. 


PERU 


443 


PERU. 

GROUP  CONFERENCE  REPORT. 


HON.  WILLIAM  G.  McAooo,  Secretary  of  the  Treasury, 

Chairman  Pan  American  Financial  Conference. 
SIR:  The  committee  having  before  it  the  data  contained  in  the 
memorandum  submitted  by  the  Peruvian  delegation,  took  up  in  order 
the  questions  suggested  by  the  Secretary  of  the  Treasury  for  the  con- 
sideration of  group  committees,  and  begs  to  submit  the  following 
resolutions  as  a  result  of  its  deliberations: 

1.  Resolved,  That  the  Peruvian  committee  favors  the  establish- 
ment in  Peru  of  branches  of  American  banks  which  will  bring  capi- 
tal into  the  country  to  facilitate  commerce  and  industry,  without 
prejudice,  however,  to  the  development  of  closer  relations  between 
established  local  financial  institutions  in  Peru  with  financial  institu- 
tions in  the  United  States,  which  will  tend  to  bring  into  more  inti- 
mate and  friendly  contact  the  financial  interests  and  sentiments  be- 
tween the  respective  countries. 

2.  Resolved,  That  the  Peruvian  committee  recommends  such  steps 
on  the  part  of  financial  interests  in  the  United  States  as  will  favor 
and  facilitate  the  placement  of  South  American  loans  in  the  financial 
markets  of  the  United  States. 

3.  Resolved,  That  the  Peruvian  committee  favors  greater  uniform- 
ity in  laws  relating  to  trade  and  commerce  and  in  customs  regula- 
tions and  more  effective  protection  of  trade-marks,  and  recommends 
these  subjects  to  the  earnest  attention  of  the  special  committee  ap- 
pointed for  the  purpose. 

4.  Resolved,  That  the  financial  institutions  in  the  United  States 
should  adopt  the  method  commonly  employed  by  similar  institutions 
in  Europe,  more  particularly  in  England  and  Germany,  whereby 
resources  are  placed  at  the  disposal  of  foreign  commerce.     In  the 
main  the  European  system  provides  for  the  discount  of  long-term 
bills  drawn  by  manufacturers  on  the  export  merchants.     This  sys- 
tem should  extend  to  drafts  of  manufacturers  on  foreign  clients  and 
to  drafts  of  the  commission  merchants  on  their  foreign  clients,  as 
well  as  to  drafts  of  manufacturers,  export  merchants,  and  commis- 
sion merchants  made  upon  the  local  banks. 

5.  Resolved,  That  inter- American  commerce  will  be  aided  by  the 
establishment  of  bonded  warehouses  in  the  several  countries,  whose 
receipts  or  warrants  will  be  accepted  by  banks  as  security  for  loans. 

445 


446  PAN  AMERICAN  ^FINANCIAL   CONFERENCE. 

6.  Resolved,  That  every  effort  should  be  made  by  financial  and 
commercial  interests  to  establish  exchange  between  the  American 
countries  on  the  dollar  basis. 

7.  Resolved^  That  the  Peruvian  committee  earnestly  favor  the 
appointment  of  an  international  commission,  for  the  purpose  of 
devising  a  plan  that  will  effect  uniformity  in  the  classification  of 
commodities  for  custom  purposes  and  to  unify,  as  far  as  possible, 
port  charges  and  regulations. 

8.  Resolved^  That  inasmuch  as  the  subject  of  a  merchant  marine 
and  improved  transportation  facilities  has  been  referred  to  a  special 
committee  of  the  financial  conference,  the  Peruvian  committee  deems 
it  sufficient  to  record  its  opinions  in  favor  of  the  large  development 
of  transportation  facilities  between  the  United  States  and  Peru. 

9.  Resolved^  That  the  Peruvian  committee  strongly  indorses  the 
principle  of  international  commercial  arbitration  to  settle  business 
disputes. 

10.  Resolved)  That  pure  food  and  drug  laws  should  be  adopted  by 
the  Pan- American  countries,  applicable  to  their  exports  as  well  as 
to  local  consumption,  in  order  to  protect  foreign  consumer  in  the 
same  degree  as  the  domestic  consumer  is  protected  against  impure 
food  and  drugs. 

The  Peruvian  committee  takes  the  opportunity  to  express  its 
appreciation  and  approval  of  the  motive  prompting  the  calling  of 
the  Pan-American  Financial  Conference,  and  of  the  plan  adopted 
of  separate  group  committees,  to  discuss  the  special  needs  and  con- 
ditions of  the  different  countries,  which  leads  to  more  thorough 
knowledge  of  the  matter  affecting  the  separate  localities,  and  it  be- 
lieves that  similar  conferences  should  be  of  periodical  occurrence. 

Respectfully  submitted, 

ISAAC  ALZAMORA,  Chairman. 


SALVADOR 


447 


SALVADOR. 


GROUP  C01TFERENCE  REPORT. 


Hon.  WILLIAM  G.  McAooo,  Secretary  of  the  Treasury, 

Chairman  Pan  American  Financial  Conference. 

SIR:  Your  committee  appointed  to  consider  financial  and  commer- 
cial relations  between  the  Eepublic  of  Salvador  and  the  United 
States  begs  to  present  its  report.  This  report  is  based  upon  a  careful 
examination  of  such  information  as  could  be  secured  not  only  in 
general  committee  but  in  three  subcommittees.  The  committee  on 
banking  problems  comprised  Dr.  Alfonso  Quifionez  M.,  Mr.  W.  S. 
Howe,  Mr.  F.  E.  Curtiss,  and  Mr.  H.  G.  P.  Deans ;  that  on  commerce 
consisted  of  Dr.  R.  Aguilar,  Dr.  W.  P.  Wilson,  Mr.  H.  C.  McQueen, 
and  Mr.  Elliott  H.  Goodwin ;  while  transportation  problems  were  con- 
sidered by  Dr.  Jose  E.  Suay,  Mr.  E.  C.  Luf kin,  Mr.  J.  H.  Ardrey,  and 
Mr.  J.  F.  Nickerson. 

The  conclusions  arrived  at  in  these  subcommittees  are  herein 
brought  together,  and  it  is  found  that  the  principal  needs  of  Salva- 
dor are: 

First.  Additional  banking  capital  as  well  as  money  for  general 
development;  and, 

Second.  Better  steamship  and  railway  facilities. 

From  information  given  us  we  are  led  to  believe  that  the  various 
other  Central  American  Republics,  as  well  as  a  number  of  countries 
farther  south,  also  require  similar  banking  facilities,  if  trade  rela- 
tions with  the  United  States  are  to  be  developed.  This  leads  to  the 
suggestion  that  consideration  be  given  to  the  organization  and  estab- 
lishment of  a  bank  with  branches  in  "all  the  different  countries  inter- 
ested upon  the  granting  by  them  of  such  facilities  for  business  a& 
are  fair  and  desirable.  We  would  suggest  that  subscriptions  to  the 
shares,  as  well  as  membership  in  the  directorate,  be  made  permissible 
to  .the  citizens  of  all  countries  in  which  branches  are  established,  this 
proposed  bank  and  its  branches  to  have  such  authority  as  would 
enable  it  to  further  the  commercial,  agricultural,  and  industrial  devel- 
opment of  the  countries,  as  well  as  their  commercial  relations  with 
the  United  States,  and  to  take  care  of  their  short-time  credits. 
98257°— 15 29  449 


450  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

In  our  opinion,  in  addition  to  the  foregoing  suggestions,  these 
objects  would  be  better  accomplished  if  a  separate  corporation  were 
to  be  organized,  not  for  the  purpose  of  receiving  deposits,  but  with 
power  to  negotiate  for  and  distribute  Government  loans  and  the 
securities  issued  by  the  various  municipalities  for  public  improve- 
ments and  for  the  furtherance  of  water  and  rail  communication 
between  various  countries.  In  order  to  procure  the  capital,  adequate 
assurances  of  a  permanent  policy  for  the  protection  of  such  invest- 
ments should  be  forthcoming. 

We  are  convinced  that  any  plan  involving  the  establishment  of 
individual  banks  in  the  separate  Republics  would  not  be  as  helpful 
to  the  development  of  trade  between  those  countries  as  would  the 
establishment  of  one  large  bank  with  branches,  which  we  believe 
would  give  the  best  results. 

It  is  immediately  apparent  that  in  this  way  capital  can  be  trans- 
ferred from  one  country  to  another,  to  be  used  at  the  time  when 
the  greatest  amount  of  credit  is  needed  for  crop-maturing  and  crop- 
moving  purposes,  and  that  in  this  way  earning  power  could  be  de- 
veloped much  more  rapidly. 

The  handling  of  the  question  of  rail  and  water  transportation 
should  be  undertaken,  in  the  first  place,  by  private  capital;  but  the 
second  corporation,  which  is  referred  to  above  in  this  report,  would 
doubtless  be  of  great  service  in  the  handling  and  marketing  and 
general  distribution  of  the  long-time  securities,  which  would  neces- 
sarily require  a  market. 

We  realize  that  this  broad  plan  would  probably  require  time  in  its 
development;  also  that  it  would  require  the  appointment  of  a  pre- 
liminary commission  which  would  meet  with  the  leading  men  of  these 
countries  with  the  idea  of  securing  the  necessary  legislation  in  all 
of  them  and  with  the  further  purpose  of  agreeing  in  a  general  way 
on  such  charter  provisions  for  the  proposed  corporations  as  would 
most  safely  and  satisfactorily  develop  the  trade  and  commerce  of  all 
the  countries  interested. 

It  is  manifest  that  no  general  or  individual  plan  for  the  establish- 
ment of  a  bank  or  banks  can  be  accomplished  without  sufficient  time 
for  careful  and  thorough  investigation  of  the  different  fields.  In  the 
meantime  if  loans  are  urgently  required  by  any  of  the  various  Gov- 
ernments, it  follows  that  these  must  necessarily  be  made  the  subject 
of  individual  negotiations  with  the  bankers  in  the  larger  cities  of 
the  United  States. 

Better  transportation  facilities  from  the  interior  of  Salvador  will 
soon  be  afforded  by  railways  now  under  construction  which  will 
connect  with  existing  railways  and  through  them  with  the  seaports. 
These  facilities  should  be  still  further  extended  by  the  construction 


GROUP  CONFERENCE   REPORTS SALVADOR,  451 

of  highways,  so  that  the  products  of  the  country  can  more  readily 
reach  the  points  from  which  they  can  be  exported  and  so  that  imports 
can  more  cheaply  and  quickly  reach  the  points  of  consumption. 

Better  transportation  by  sea  is  greatly  needed,  so  that  mails,  pas- 
sengers, and  products  can  more  regularly  and  speedily  pass  between 
Salvador  and  the  United  States.  Such  marine  transportation  will 
beyond  doubt  be  afforded  promptly  whenever  financial  provisions 
have  been  perfected  which  will  produce  a  stimulation  of  commerce, 
but  'pending  such  stimulation  of  commerce  it  is  very  important  that 
inducements  be  offered  for  the  maintenance  of  suitable  ocean  trans- 
portation. 

Salvador  will  gladly  give  all  possible  encouragement  to  the  up- 
building of  its  transportation  facilities,  and  if  commerce  between 
Salvador  and  the  United  States  is  to  be  developed  the  United  States 
should,  in  such  manner  as  may  be  possible,  assist  in  this,  one  of  the 
most  important  needs  for  the  development  and  prosperity  of  Salvador. 

Finally,  the  subcommittee  on  commerce  would  venture  to  summa- 
rize certain  specific  conclusions  in  the  following  manner: 

First.  This  subcommittee  calls  attention  to  the  lack  of  any  com- 
mercial treaty  between  Salvador  and  the  United  States,  and  unites  in 
a  recommendation  to  the  Governments  of  both  countries  that  a  com- 
mercial treaty  containing  concessions  mutually  and  equally  advan- 
tageous be  negotiated  with  all  possible  dispatch. 

Second.  The  committee  points  to  the  lack  of  any  chamber  of  com- 
merce or  commercial  organization  in  Salvador,  and  recommends  the 
establishment  of  such  a  body  to  forward  the  commerce  between  the 
two  countries  through  constant  intercourse  with  chambers  of  com- 
merce in  the  United  States. 

Third.  The  cooperation  of  the  banking  institutions  in  both  coun- 
tries is  earnestly  solicited  in  the  establishment  of  reasonable  credits 
and  the  prompt  furnishing  of  reliable  credit  information  to  those  in 
each  country  desiring  to  trade  with  the  other  country. 

Fourth.  In  the  furtherance  of  commercial  relations  between  the 
two  countries,  the  committee  emphasizes  the  advantage  of  the  estab- 
lishment of  a  plan  for  the  exchange  of  students  as  well  as  of  com- 
mercial and  agricultural  information,  to  be  brought  about  through 
either  the  Governments  or  the  chambers  of  commerce  of  the  two 
countries. 

Respectfully  submitted. 

ALFONSO  QUINONEZ  M.,  Chairman. 


URUGUAY 


453 


URUGUAY . 


GROUP  CONFERENCE  REPORT. 


Hon.  WILLIAM  G.  McAooo,  Secretary  of  the  Treasury ', 

Chairman  Pan  American  Financial  Conference. 
SIR  :  The  committee  has  adopted  the  following  resolutions : 

I.  MARITIME  TRANSPORTATION. 

Whereas  it  is  absolutely  essential  to  the  development  of  the  com- 
mercial relations  between  the  American  Republics  that  adequate 
transportation  facilities  be  promoted : 

Resolved,  That  we  favor  the  passage  of  laws  tending  to  place  the 
merchant  marines  of  the  American  Republics  on  a  basis  of  equality 
with  that  of  all  other  countries  by  removing  legal  restrictions  which 
may  exist  or  granting  direct  or  indirect  subsidies,  or  both. 

II.  SYSTEM  OF  WEIGHTS  AND  MEASURES. 

Weights  and  measures  in  the  American  countries  should  be  uni- 
form. The  metrical  system  should  be  adopted,  and  until  this  has 
been  done  prices,  invoices,  and  bills  of  lading  should  be  made  up  in 
metrical  unity. 

III.  COMMUNICATION  BY  CABLE — How  TO  RENDER  IT  MORE  ECONOMICAL. 

It  was  suggested,  and  approved  with  unanimity,  to  recommend  to 
the  telegraphic  companies  to  put  their  rates  on  a  par  with  the  Eu- 
ropean rates,  that  each  Government  seek  to  install  a  wireless  system 
from  country  to  country,  and  that  they  take  up  the  question  of 
lowering  the  tariff  rates. 

IV.  MONETARY  UNITY,  EXCHANGES,  AND  ARBITRAGES. 

Whereas  it  is  desirable  that  exchange  operations  between  the 
American  Republics  be  simplified;  that  transactions  between  these 
countries  be  based  upon  a  fixed  gold  standard  of  value;  and  that 
statistics  be  kept  in  uniform  manner  in  the  various  Republics, 

Resolved,  That  we  favor  the  adoption  by  the  American  Republics 
of  an  international  monetary  unit. 

455 


456  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

V.  AMERICAN  BANKS. 

Resolved,  That  the  conference  declare  that  the  countries  of  the 
American  Republics  should  facilitate  the  relations  of  their  repre- 
sentative banks  for  the  discount  of  bills,  movement  of  capital,  fos- 
tering of  trade  and  financial  assistance  of  public  works,  and  develop- 
ment of  the  wealth  of  the  American  Cont'inent. 

VI.  COMMERCIAL  CREDIT,  SALES,  AND  TIME. 

Whereas  it  is  essential  to  the  proper  development  of  commerce 
between  the  American  Republics  that  adequate  credit  terms  be 
granted  by  North  American  sellers  to  South  and  Central  American 
purchasers;  and 

Whereas  such  credit  terms  can  be  arranged  only  through  the  full- 
est cooperation  on  the  part  of  such  sellers  and  purchasers  and  their 
respective  bankers;  and 

Whereas  it  appears  that  best  results  can  be  obtained  in  many  in- 
stances through  practical  cooperation  on  the  part  of  the  bankers  of 
all  the  countries  in  the  form  of  a  division  of  the  banking  duties  con- 
nected with  such  credit  arrangements,  the  bankers  of  the  North 
American  seller  furnishing  the  required  capital  and  the  bankers 
of  the  South  and  Central  American  purchaser  furnishing  the  re- 
quired credit, 

Resolved,  That  this  committee  make  the  following  recommenda- 
tions : 

(a)  That  North  American  banks  recommend  to  their  clients  the 
granting  of  adequate  credit  terms  in  connection  with  the  sale  of 
merchandise  to  South  and  Central  American  merchants  in  all  cases 
where  proper  information  has  been  given  or  suitable  credit  arrange- 
ments have  been  made. 

(b)  That  North  American  banks  discount  freely  at  favorable  rates 
drafts  drawn  at  terms  up  to  six  months'  sight  by  their  clients  cover- 
ing the  exports  of  merchandise  to  South  and  Central  America. 

(c)  That  South  American  and  Central  American  banks  explain  to 
their  clients  the  necessity  of  giving  complete  financial  statements, 
including  a  copy  of  the  balance  sheet  and  profit  and  loss  account  in  all 
cases  where  international  credit  is  desired. 

(d)  That  in  cases  where  such  complete  financial  statements  are 
unobtainable  or  where  such  statement  does  not  show  sufficient  strength 
to  warrant  the  extension  of  credit  by  an  institution  located  in  a  dis- 
tant country,  the  South  and  Central  American  banks  shall  open  cred- 
its in  favor  of  such  clients  on  such  terms  as  will  in  effect  furnish  the 
credit  to  such  clients  while  the  North  American  bank  shall  furnish  the 
capital  by  discounting  drafts  against  such  credits. 


GROUP  CONFERENCE  REPORTS — URUGUAY.  457 

VII.  POSTAL  UNION — ADHESION  OF  THE  NORTH  AMERICAN  COUNTRIES 
TO  THE  SOUTH  AMERICAN  POSTAL  UNION  IN  ORDER  TO  FACILITATE 
AND  CHEAPEN  MAIL  SERVICE. 

Approved  the  following  resolution  and  referred  to  the  general  com- 
mittee of  the  conference. 

Mail  between  the  American  Republics  should  be  regulated  by  the 
prescriptions  of  the  South  American  Postal  Convention  held  in  Mon- 
tevideo in  1911. 

VIII.  FACILITIES  THROUGH  CUSTOMHOUSES  AND  IN  OTHER  WAYS  FOR 

COMMERCIAL  INTERCHANGE  BETWEEN  AMERICAN  COUNTRIES. 

Resolved,  That  the  conference  declares  there  is  positive  advantage 
for  the  American  Republics  in  establishing  reciprocal  tariff  arrange- 
ments and  if  necessary  provide  other  means  which  would  contribute 
toward  securing  profitable  markets  for  their  excess  of  production. 

IX.  INTERCHANGE  OF  STUDENTS  IN  THE  HIGHER  BUSINESS  SCHOOLS  BE- 
TWEEN THE  AMERICAN  COUNTRIES  AND  ESTABLISHMENT  OF  MERCAN- 
TILE MUSEUMS  IN  SUCH  SCHOOLS. 

Resolved,  That  the  conference  strongly  advocates  the  interchange 
of  students  and  the  establishment  of  a  mercantile  museum  or  perma- 
nent exposition  of  Pan  American  products  among  the  countries  of 
the  American  Continent. 

X.  NECESSITY  OF  DIMINISHING  IMPOSTS  ON  THE  NECESSARIES  OF  LIFE 

AND  INCREASE  OF  THOSE  REFERRING  TO  OTHER  ARTICLES — LAWS  FOR 
PROGRESSIVE  TAXES  ON  INHERITANCES  AND  ADOPTION  OF  INTERNA- 
TIONAL MEASURES  IN  ORDER  TO  OVERCOME  FRAUD. 

Resolved,  That  answering  the  question  put  by  letter  D  of  the  fourth 
division  of  questions  suggested  by  the  Secretary  of  the  Treasury  for 
the  consideration  of  the  group  committees,  the  conference  considers 
that  it  would  be  advantageous  as  the  basis  for  a  good  taxing  system  to 
decrease  the  duties  in  the  American  Republics  on  the  primary  mate- 
rials and  articles  necessary  to  life,  as,  for  example,  food  and  clothing, 
etc.,  substituting  them  as  far  as  possible  with  the  increase  of  duties 
on  superfluous  articles  for  life  and  luxury  directly  applied  or  in  the 
form  of  a  State  monopoly  which  will  prevent  fraud  in  collecting 
those  taxes.  It  would  also  be  advisable  to  legislate  with  regard  to 
graduated  taxes  on  the  inheritance  in  order  to  prevent  the  transmis- 
sion of  capital  from  one  country  to  another  with  the  purpose  of  de- 
frauding the  collection  of  such  taxes. 

The  foregoing  matter  which  constitutes  one  of  the  topics  of  the 
questions  suggested  by  the  Secretary  of  the  Treasury  for  the  con- 
sideration of  the  group  committees  of  the  conference  was  considered 
and  unanimously  approved. 


458  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

XI.  EFFECTIVE  PROTECTION  OF  TRADE- MARKS,  ETC. 

Resolved:  That,  as  provided  for  in  the  special  convention  on  the 
subject  in  the  Fourth  Fan  American  Conference,  that  the  most  effec- 
tive enactments  for  the  protection  of  trade-marks  have  been  declared 
and  been  authorized  by  the  American  nations  and  as  the  said  con- 
vention has  been  ratified  by  several  nations,  among  whom  is  the 
United  States,  the  ratification  by  those  that  have  not  heretofore 
recognized  it  is  hereby  recommended. 

The  principles  proclaimed  at  the  South  American  International 
Congress  of  Montevideo  (1888)  were  confirmed  in  the  subsequent  Pan 
American  conferences  which  were  held  in  Washington,  Mexico,  and 
Rio  de  Janeiro,  and  at  the  Fourth  Pan  American  Conference  of 
Buenos  Aires  (1910)  and  three  treaties  of  the  greatest  importance  were 
approved:  One  relative  to  literary  and  artistic  copyrights,  another 
regarding  patents  and  inventions,  drawings  and  industrial  models, 
and  another  concerning  trade-marks  and  commercial  names  for  the 
purpose  of  guaranteeing  the  rights  of  authors,  inventors,  manufac- 
turers and  merchants  in  all  the  countries  of  America,  of  facilitating 
the  international  use  of  inventions  and  of  trade-marks  giving  them 
protection  equal  to  that  granted  by  any  of  the  signatory  nations. 

In  1909  Uruguay  had  amended  its  law  of  1877  for  the  protection 
of  trade-marks  and  commercial  names ;  had  made  it  conform  to  the 
latest  modifications  accepted  by  previous  European  and  American 
international  conventions;  and  had  definitely  settled  several  of  the 
most  important  problems  on  the  ownership  of  trade-marks,  effects 
of  registration,  the  use  of  such  marks,  and  the  right  of  nullification 
in  order  to  prevent  violations  of  accredited  marks  in  use,  guarantees 
for  foreign  marks,  and  rights  of  the  owners  of  the  latter  even  when 
not  registered.  The  legal  procedure  of  Uruguay  to  prosecute  the 
usurpers  or  defrauders  is  the  most  efficacious  possible. 

In  the  convention  signed  in  the  Fourth  Pan  American  Conference 
of  Buenos  Aires  the  principal  provisions  for  the  protection  of  trade- 
marks and  commercial  names  were  established  in  nineteen  articles. 
The  mere  reading  of  that  convention,  so  carefully  written,  shows  that 
the  most  adequate  measures  have  been  adopted  and  that  what  is 
required  is  that  the  ratification  of  that  convention  be  continued  by 
all  the  signatory  nations. 

The  United  States  has  ratified  this  convention,  as  other  countries 
of  America  have  done. 

The  first  ten  articles  of  the  convention  mentioned  contain  every- 
thing desirable  for  the  complete  protection  of  trade-marks  and  com- 
mercial names  from  an  international  point  of  view ;  and  if  to  this  we 
add  that  the  law  of  Uruguay  of  1909  on  this  matter  contains  the 
most  advanced  and  liberal  measures,  the  Uruguayan  Delegation 


GBOUP   CONFERENCE   REPORTS URUGUAY.  459 

understands  that  the  conference  is  sufficiently  authorized  to  confirm 
once  more  the  principles  contained  in  the  special  convention  of 
Buenos  Aires,  which,  without  clashing  with  the  internal  legislation 
of  each  country,  proposed  to  render  uniform,  as  far  as  possible,  the 
national  enactments  in  accordance  with  articles  11  and  13  of  said 
convention,  in  order  that  such  protection  may  be  efficacious  in  all 
the  countries  forming  the  Pan  American  Union. 
Kespectfully  submitted. 

PEDRO  Cosio,  Chairman. 


VENEZUELA 


461 


VENEZUELA. 


GROUP  CONFERENCE  REPORT. 


Hon.  WILLIAM  G.  McAooo,  Secretary  of  the  Treasury ', 

Chairman  Pan  American'  Financial  Conference. 
SIR:  The  group  conference  committee,  which  was  intrusted  with 
the  examination  of  the  most  suitable  means  of  establishing  closer 
commercial  and  financial  relations  between  the  Republic  of  Vene- 
zuela and  the  people  of  the  United  States  of  America,  begs  to  inform 
the  general  conference  that  it  has  made  a  study  of  existing  condi- 
tions, and  in  presenting  this  report  divides  it  into  several  sections, 
treating  them  in  the  order  of  their  importance. 

MERCHANT  MARINE  AND  IMPROVED   OCEAN   TRANSPORTATION   FACILITIES. 

We  consider  it  of  the  greatest  importance  for  the  development  of 
a  more  extended  volume  of  business  and  commercial  relations  be- 
tween the  United  States  and  Venezuela  that  means  of  regular  com- 
munication by  steamships  of  ample  tonnage  be  established.  In 
order  to  accomplish  this  it  is  necessary  that  every  encouragement  be 
given  by  both  the  United  States  and  the  Venezuela  Governments  to 
any  enterprise  in  this  direction  which  may  be  adopted  as  a  result 
of  this  Pan  American  Conference.  These  steamers  should  be  built 
in  such  manner  as  to  attract  not  only  those  interested  in  commercial 
affairs  but  also  those  of  both  countries  who  travel  for  pleasure.  For 
only  by  assurance  of  speed,  safety,  and  comfort  can  the  great  tide  of 
travel  be  diverted  from  its  tendency  hitherto  in  the  direction  of 
European  countries.  Every  North  American  visiting  Venezuela  and 
every  South  American  visiting  the  United  States  becomes  a  mission- 
ary amongst  his  countrymen  for  continuous  and  increased  inter- 
course, and  all  these  visitors  will  be  the  means  of  promoting  not 
only  greater  trade  relations,  but  also  closer  social  ties  and  better 
understanding  in  every  respect. 

We  are  informed  that  the  present  time  consumed  by  steamships  of 
the  Red  D  Line  is  from  nine  and  one-half  to  ten  days,  distance  1,860 
miles,  and  that  the  accommodations  are  inferior  to  those  sailing  to 

European  ports. 

463 


464 


PAN  AMERICAN   FINANCIAL  CONFERENCE. 


We  consider  it  of  the  utmost  importance  that  our  country,  in  re- 
gard to  its  communication  with  South  and  Central  America,  be  in- 
dependent of  all  other  countries,  and  that  the  development  of  this 
direct  marine  communication  shall  be  free  of  any  political  influence, 
but  considered  only  for  the  development  of  the  great  financial  and 
commercial  interests  of  these  countries. 

Under  normal  conditions  the  volume  of  foreign  trade  in  a  given 
direction  is  in  direct  ratio  with  the  steamship  facilities,  so  states  a 
report  of  January  16,  1915,  of  the  American  minister,  the  honorable 
Preston  McGoodwin.  As  an  illustration  of  this  he  states  that  from 
the  port  of  Maracaibo,  which  is  in  direct  and  frequent  steamship 
communication  only  with,  the  United  States,  there  is  sent  to  that 
country  over  63  per  cent  of  its  exports,  and  in  return  receives  more 
than  42  per  cent  of  its  imports  from  the  United  States,  notwithstand- 
ing the  fact  that  nearly  all  the  greatest  commercial  houses  in  that 
city  belong  to  Europeans. 

IMPROVED  POSTAL  FACILITIES. 

The  committee  begs  to  call  the  attention  of  the  general  conference 
to  the  fact  that  while  a  parcel-post  convention  exists  between  the 
United  States  and  Venezuela  no  money-order  service  exists.  In  our 
opinion,  this  should  be  remedied. 

SUMMARY  OF  FOREIGN  TRADE  OF  VENEZUELA. 

The  summary  of  the  foreign  trade  for  the  years  1912-13  and  1913- 
14  was  as  follows : 


Imports  and  exports. 

1912-13 

1913-14 

Total  imports  

$19  667  457 

$17  005  503 

Total  exports 

28  776  530 

26  323  823 

IMPORTS. 

United  States  

7  684  393 

6  158  122 

United  Kingdom                ... 

4  217  724 

4'  260*  390 

Germany       

3  125'  131 

2'  407'  672 

Netherlands                .           .         .                   ..                 . 

1  701  602 

1  728  243 

France 

1  164  406 

l'  lio'  960 

Spain      

'  880'  857 

'  566'  858 

Italy 

655  884 

535'  638 

EXPORTS. 

United  States  

9  850  151 

8  6H  924 

France 

9  092  161 

8  430  421 

Germany  

5  150'777 

4'  162'  088 

United  Kingdom 

1  836  178 

1  862  850 

Spain 

1  329  141 

l'  272  '556 

Netherlands 

'  784  '639 

'828*868 

Italy  

209  146 

185  554 

It  is  evident  from  these  statistics  how  large  a  portion  of  the 
imports  into  Venezuela  are  diverted  to  other  countries  outside  of  the 
United  States,  which  is  its  nearest  neighbor.  In  other  words,  in 
1913-14  the  imports  from  the  United  States  were  approximately 
$6,000,000  as  compared  to  $10,000,000  from  other  countries. 


GROUP   CONFERENCE   REPORTS VENEZUELA.  465 


THE  EXTENSION  OF  INTER-AMERICAN  MARKETS. 

* 

In  examining  the  lists  of  articles  imported  into  Venezuela  we  find 
the  United  States  does  not  lead  in  the  exportation  of  agricultural 
implements,  bags  and  baggings,  coal,  cotton  goods  and  woolen  goods, 
butter,  cotton  knit  goods,  hats,  malt,  and  rice.  With  the  unsurpassed 
resources  for  the  manufacturing  of  agricultural  implements,  cotton 
goods,  woolen  goods,  hats,  etc.,  it  is  to  be  regretted  that  the  United 
States  has  not  had  more  success  in  the  sale  of  these  articles  in  Vene- 
zuela. The  causes  for  this,  howrever,  are  manifold,  and  should  be 
removed  by  adapting  the  system  of  packing  merchandise  to  meet  the 
desires  and  uses  of  South  American  customers.  The  United  States 
should  also  send  trained  representatives  to  Venezuela  and  other 
South  American  countries,  who  are  thoroughly  conversant  with  the 
language. and  familiar  with  the  customs  of  the  people.  More  sym- 
pathetic attention  should  be  given  to  the  reports  of  these  representa- 
tives, for  in  this  way  each  would  become  more  intimately  acquainted 
with  the  ideas  and  desires  of  the  other  and  acquire  the  knowledge 
which  is  so  necessary  for  the  extension  of  trade. 

LICENSE   TAXES. 

Commercial  travelers  from  abroad  are  not  subject  to  license  taxes 
in  Venezuela.  Samples  are  allowed  free  of  duty  for  a  limited  time, 
provided  a  sufficient  security  is  furnished  to  guarantee  the  payment 
of  the  regular  duties  in  case  reexportation  should  not  take  place 
within  a  fixed  period. 

CREDITS. 

The  questions  of  credits  will  be  a  most  important  one  in  the  estab- 
lishment of  large  commercial  relations  between  the  United  States 
and  Venezuela.  It  is  hoped  by  this  conference  committee  that  in  the 
course  of  time  a  system  of  dissemination  in  regard  to  the  commercial 
practices  prevalent  in  the  United  States  will  be  brought  to  the 
knowledge  of  merchants  in  Venezuela,  so  that  a  larger  volume  of 
credit  business  may  be  established  between  the  two  countries.  The 
conference  understands  fully  that  Venezuela  being  an  agricultural 
country,  the  question  of  credits  is  an  important  one,  and  European 
countries  familiar  with  these  conditions  have  always  been  inclined 
to  extend  these  credits.  American  merchants  will  no  doubt  be 
pleased  to  extend  large  and  ample  credit  relations,  provided  all  facts 
for  passing  these  credits  are  freely  tendered  by  those  seeking  such 
accommodations.  In  the  opinion  of  this  committee,  banks  in  Vene- 
zuela, as  well  as  in  the  United  States,  should  cooperate  in  bringing 
about  a  full  and  increased  development  of  commercial  credit  re- 
lations. 

98257°— 15 30 


466  PAN   AMERICAN    FINANCIAL   CONFERENCE. 

INTERNATIONAL  ARBITRATION    COURTS. 

In  developing  business  between  Venezuela  and  the  United  States 
there  will  no  doubt  at  some  times  be  questions  of  disputes  arising 
between  the  respective  merchants  which  would  require  friendly 
arbitration.  The  committee  therefore  looks  with  favor  upon  the 
suggestion  made  by  the  Argentine  Republic  for  the  establishment  of 
an  international  arbitration  court  providing  for  the  settlement  of 
commercial  disputes  in  all  the  countries  of  North  and  South  Amer- 
ica. This  would  greatly  simplify  the  methods  of  business  procedure 
between  our  respective  countries. 

DISTRIBUTION   OF   NEWS   THROUGH   AMERICAN    NEWSPAPERS. 

Confidence  in  South  American  Republics  is  growing  because  of 
the  well-established  governments  which  are  now  ruling  the  coun- 
tries. To  build  up  strong  and  mutual  trade  relations  it  would  be 
very  desirable  that  the  newspapers  and  periodicals  of  the  United 
States,  in  the  interest  of  justice  to  the  people  of  South  and  Central 
America  as  well  as  to  their  readers  in  the  United  States,  confine 
themselves  to  well- authenticated  news  reports  rather  than  to  erro- 
neous reports  of  disturbances,  which  so  frequently  appear  in  news 
columns  and  which  are  more  frequently  matters  of  imagination  and 
cause  an  injurious  effect  on  their  mutual  cordial  relations. 

PUBLIC  UTILITIES. 

It  seems  that  a  most  promising  field  for  immediate  investigation 
is  presented  by  the  public  utility  companies  which  furnish  electric 
light  and  power  in  the  cities  of  South  America. 

These  companies  have  been  founded  on  European  capital,  and  their 
subsequent  development  and  expansion  have  been  carried  on  usually 
by  issues  of  bonds  placed  in  Europe.  Capital  from  this  source  has 
been  practically  cut  off. 

Bonds  of  this  description  are  usually  well  protected  by  being  con- 
stituted a  lien  on  the  property,  by  statutes  limiting  to  a  reasonable 
amount  the  issues,  and  by  conservative  amortization  plans. 

A  most  important  consideration  in  this  connection  is  that  the 
financing  of  such  companies  would  constitute  a  very  powerful  aid  to 
securing  the  permanent  trade  in  their  valuable  machinery  and  sup- 
plies of  all  descriptions  for  the  generation  and  transmission  of  elec- 
tric power  and  lighting. 

This  committee  is  informed  that  there  are  two  such  companies  in 
Venezuela.  In  the  opinion  of  the  committee  American  capital  could 
be  profitably  invested  in  Venezuela  to  assist  in  carrying  to  comple- 
tion the  works  which  have  been  recently  suspended,  and  also  to 
undertake  new  work  of  this  description. 


GROUP   CONFERENCE   REPORTS — VENEZUELA.  467 

RAILROADS  AND  PUBLIC  IMPROVEMENTS. 

The  total  railroad  mileage  of  Venezuela  is  in  the  neighborhood  of 
500  miles.  The  opportunities  for  an  extension  of  a  railroad  system 
seem  very  great,  for  Venezuela  is  a  rich  agricultural  country.  The 
area  is  approximately  400,000  square  miles,  the  population  approxi- 
mately 3,000,000. 

It  is  therefore  the  opinion  of  this  conference  committee  that  great 
efforts  should  be  made  for  the  development  of  the  internal  communi- 
cations of  this  rich  agricultural  country. 

We  repeat  in  closing  this  argument  that  we  regard  it  of  the  utmost 
importance  that  steamships  be  given  first  consideration  in  treating 
with  this  subject  of  increased  relations.  Trade  will  follow  in  a  large 
measure  increased  steamship  facilities. 

MONETARY  SYSTEM  OF  VENEZUELA  IS  ESTABLISHED  ON  SOUND  GOLD  BASIS. 

Paper  money  not  legal  tender. — "  Neither  the  legislative  nor  the 
executive  power  nor  any  authority  of  the  Republic  shall  issue  paper 
money  in  any  case  or  under  any  circumstances  whatever,  nor  declare 
as  legal  tender  any  kind  of  bank  notes  nor  any  value  represented  on 
paper,  nor  allow  the  importation  into  Venezuela  of  any  foreign  or 
national  currency  but  that  of  gold  coins."  (Handbook  of  Venezuela, 
1904,  p.  439.) 

The  banking  facilities  required  to  conduct  proper  business  transac- 
tions will  in  due  course  of  time,  without  doubt,  be  sufficiently  fur- 
nished by  the  bankers  of  both  countries. 

THE  NATIONAL  DEBT. 

The  conference  committee  has  heard  with  great  pleasure  from  the 
representative  from  Venezuela  as  to  the  good  condition  of  the  country 
in  regard  to  its  national  debt,  which  is  as  follows  at  the  latest  date.1 

Debt :  Bolivars.3 

Internal 60,  244,  565.  89 

External 110,  987,  296.  77 


Summary  of  public  debt : 
Internal  debt — 

National  consolidated  internal  debt,  6  per  cent 40, 199.  59 

National  consolidated  internal  debt,  3  per  cent 59,  075,  925.  22 

National  consolidated  internal  debt,  no  interest 1, 128,  441.  08 


60,  244,  565.  89 

External  debt — 

Diplomatic  debt,  3  per  cent 101, 267,  650. 00 

Diplomatic  conventions  debt,  amortizable,  3  per  cent 3,  986, 156.  51 

Diplomatic  conventions  debt,  not  amortizable,  3  per  cent-  •    5,  733, 490.  26 


110,  987,  296.  77 


1  Statement  brought  up  to  March  19,  1915. 

2  Bolivar=$0.193  gold. 


468  PAN  AMERICAN   FINANCIAL   CONFERENCE. 

Statement  taken  from  report  of  Sr.  Roman  Cardenas,  Minister  of 
Finance,  made  April  19,  1915. 

The  conference  committee  also  hears  with  great  pleasure  from  the 
representatives  from  the  Venezuela  Government  that  all  interest  on 
the  debt  of  the  country  has  been  promptly  paid  during  the  trying 
times  of  the  war  period  through  which  we  are  passing.  This  is  a 
very  gratifying  evidence  of  the  financial  stability  of  the  country. 

The  committee  refers  with  particular  pleasure  to  the  assistance 
given  it  by  the  representatives  of  the  Republic  of  Venezuela,  and  to 
the  various  reports  which  the  representatives  have  handed  it,  giving 
full  details  as  to  the  exports  and  imports  of  the  Republic  of  Vene- 
zuela. These  were  particularly  useful  to  it  in  the  preparation  of 
this  report. 

Respectfully  submitted. 

PEDRO  RAFAEL  RIN CONES,  Chairman. 


BANQUET  TENDERED  TO  THE  DELE- 
GATES TO  THE  PAN  AMERICAN 
FINANCIAL  CONFERENCE  BY  THE 
SECRETARY  OF  THE  TREASURY  OF 
THE  UNITED  STATES  «'  «  « 

HALL  OF  THE  AMERICAS,  PAN  AMERICAN  BUILDING 
MAY  29,  1915 

469 


PROCEEDINGS  AT  THE  BANQUET  TENDERED  TO  THE 

DELEGATES. 

The  delegates  assembled  in  the  banquet  hall  in  the  Pan  American 
Building  at  "eight  o'clock  p.  m. 

At  the  hour  of  ten  the  Honorable  William  G.  McAdoo,  Secretary 
of  the  Treasury,  rose  and  said : 

Gentlemen,  I  want  to  ask  you  to  drink  to  the  health  of  the  Presi- 
dents of  the  Republics  of  South  and  Central  America,  individually 
and  collectively.  In  proposing  that  toast  I  hope  it  typifies  the 
spirit  which  I  think  animates  this  great  gathering — one  for  all  and 
all  for  one  [applause] — the  spirit  that  I  hope  will  animate  the 
Republics  of  South  and  Central  America  and  the  United  States  of 
America  in  their  dealings  with  one  another.  [Applause.] 

The  delegates  rose  and  drank  the  toast  proposed. 

Ambassador  DOMICIO  DA  GAMA  (Brazil)  rose,  amid  applause. 

Ambassador  DA  GAMA.  Gentlemen,  you  are  right  in  applauding 
me,  because  I  am  simply  rising  to  drink,  and  to  invite  you  to  drink 
with  me,  to  the  President  of  the  United  States  of  America.  [Ap- 
plause.] 

Secretary  McAooo.  Gentlemen,  I  am  going  to  ask  the  Secretary  of 
State  of  the  United  States  to  respond  to  the  toast  "  The  Presidents 
of  the  South  and  Central  American  Republics."  The  Secretary  of 
State.  [Applause.] 

RESPONSE  OF  THE  SECRETARY  OF  STATE  THE  HONORABLE  WIL- 
LIAM JENNINGS  BRYAN  TO  THE  TOAST,  "  THE  PRESIDENTS  OF 
THE  SOUTH  AND  CENTRAL  AMERICAN  REPUBLICS." 

MR.  SECRETARY,  EXCELLENCIES,  AND  GENTLEMEN  : 

You  have  been  so  generous  in  the  amount  of  time  that  you  have  al- 
lowed to  me  during  these  conferences  that  it  requires  the  command  of 
the  Secretary  of  the  Treasury  to  bring  me  before  you  again.  He 
could  not,  however,  have  given  me  a  subject  more  agreeable  to  my 
feelings  than  that  which  he  has  assigned  to  me.  You  were  welcomed 
by  the  President  of  the  United  States — the  one  who  speaks  for  all 
the  people — and  I  am  sure  that  among  the  many  addresses  of  wel- 
come he  has  delivered,  he  never  spoke  more  sincerely  or  cordially 
than  when  he  greeted  you  upon  the  day  of  your  arrival.  I  am  near 
enough  to  him  to  know  with  what  deep  and  constant  sympathy  he 

471 


472  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

has  considered  all  the  questions  which  have  come  before  him  in  con- 
nection with  the  interests  of  our  sister  Republics.  He  spoke  to  you 
from  his  heart,  and  I  assure  you  that  all  that  is  dear  to  you  is  dear 
to  him,  to  those  associated  with  him,  and  to  the  people  for  whom  he 
speaks. 

It  is  my  good  fortune  to  know  the  Latin  American  Republics  quite 
intimately.  I  have  the  honor  to  be  acquainted  with  the  Presidents 
of  some  of  these  Republics  and  others  have  given  me  reason  to  have 
a  high  opinion  of  their  wisdom  because  of  the  men  whom  they  have 
selected  to  represent  them  at  Washington.  No  part  of  my  duty  as 
Secretary  of  State  has  been  more  congenial  or  given  me  greater  pleas- 
ure than  that  of  associating  intimately  with  the  ambassadors  and 
ministers  who  represent  the  Republics  of  South  and  Central  America. 

We  have  had  a  recent  evidence  of  the  good  judgment  of  your 
chief  executives  in  the  character  of  the  delegates  selected  for  this 
meeting.  You  came  into  our  confidence  through  the  credentials 
which  you  brought  from  your  Governments;  you  return  carrying 
with  you  our  esteem  and  affection;  you  have  won  us  by  your  own 
merit  and  by  the  intelligent  interest  which  you  have  taken  in  the 
questions  which  concern  Pan  America.  [Applause.] 

It  is  not  proper  at  this  hour  that  anyone,  I,  least  of  all,  should 
occupy  much  of  your  time,  but  I  shall  speak  long  enough  to  violate 
one  rule  of  oratory,  namely,  the  one  which  limits  the  speaker  to  one 
subject,  compels  him  to  discuss  it  thoroughly,  and  then  stop.  I  shall 
violate  the  first  part  of  the  rule  by  taking  two  subjects,  and  the 
second  part  of  the  rule  by  not  discussing  either  thoroughly.  I  hope 
to  observe  the  last  part  of  the  rule  by  stopping  when  I  am  through. 
[Laughter.]  The  first  thought  which  I  desire  to  submit  was  sug- 
gested by  an  experience  which  I  had  when,  five  years  ago,  I  made  a 
trip  to  South  America.  At  Sao  Paulo,  Brazil,  the  second  city  of  the 
Republic,  I  visited  a  normal  school  which  was  established,  and  is  still 
conducted,  according  to  plans  taken  by  an  American  woman  from 
New  York.  I  was  welcomed  by  one  of  the  professors,  who  addressed 
me  in  my  own  language,  and  welcomed  again  by  a  student,  who  like- 
wise used  the  only  language  with  which  I  am  familiar;  and  then, 
when  the  program  was  over,  the  entire  school  arose  and  sang  in 
English — 

My  country,  'tis  of  thee, 
Sweet  land  of  liberty, 
Of  thee  I  sing. 

I  still  feel  the  thrill  of  that  moment,  and  it  suggests  to  my  mind 
the  thought  which  I  submit  for  your  consideration.  Why  not  make 
the  air  of  that  song  a  Pan  American  air,  each  country  using  its  own 


BANQUET.  473 

language  and  words  of  its  own  selection?  Then,  on  such  occasions 
as  these,  we  can  sing  together,  all  joining  in  the  tune,  but  each  using 
the  familiar  language  of  his  own  national  hymn.  If  the  suggestion 
is  worthy  of  consideration,  I  am  sure  that  poets  will  be  found  in 
each  country  to  carry  out  the  idea.  [Applause.] 

The  second  thought  will  not,  I  am  sure,  be  out  of  place  here ;  it  is 
the  value  of  the  acquaintances  which  have  been  formed  here.  In  the 
last  prayer  of  the  Savior  you  will  find  an  explanation  of  error  which 
is,  I  fear,  too  often  overlooked.  His  plea  was  "  Father,  forgive  them, 
for  they  know  not  what  they  do"  Ignorance  is  the  fruitful  source 
of  sin  in  the  individual ;  it  is  the  common  cause  of  misunderstandings 
between  nations.  [Applause.]  Our  coming  together  on  such  occa- 
sions as  these  enables  us  to  know  each  other  better,  and  when  we 
know  each  other  we  understand  that  the  mistakes  that  are  made  are 
not  of  the  heart  but  of  the  head,  and  we  are  all  conscious  enough  of 
the  frailty  of  the  human  intellect  to  be  charitable  toward  each  other 
if  assured  that  the  supposed  wrong  was  not  really  intended.  This 
conference,  with  the  acquaintances  formed  and  the  friendships  be- 
gun, will  make  misunderstandings  less  frequent  and  the  amicable 
settlement  of  them  more  certain,  if  by  any  misfortune  misunder- 
standings do  arise.  This  is  only  the  beginning  of  these  conferences ; 
the  success  of  this  one  insures  future  gatherings,  and  no  one  can 
foretell  the  benefits  which  will  flow  from  them. 

And  now  let  me  ask  you  to  carry  back  to  the  Presidents,  whose 
representatives  you  are,  assurances  of  our  respect  and  esteem;  say 
to  them  that  we  recognize  that,  inspired  by  the  same  lofty  purposes 
and  acting  in  conformity  with  the  same  principles  of  government, 
they,  like  our  officials,  are  seeking  to  advance  the  welfare  of  the 
countries  for  which  they  speak.  I  join  you  in  the  hope  that  the 
rivalries  of  the  future  will  be  those  honorable  rivalries  which  are 
a  blessing  to  those  who  participate  in  them,  each  endeavoring  to 
excell  in  the  contributions  made  to  the  welfare  of  all.  Thus  may  we 
assist  each  other  and  live  up  to  the  opportunities  and  responsibilities 
of  neighborhood — "  What  God  hath  joined  together,  let  no  man  put 
asunder."  [Loud  and  continued  applause.] 

Secretary  McADOo.  Gentlemen,  the  dean  of  the  diplomatic  corps 
of  South  and  Central  America,  Ambassador  Da  Gama,  has  been  good 
enough  to  agree  to  respond  to  the  toast  "  The  President  of  the  United 
States."  I  now  have  the  honor  of  introducing  him. 

The  members  of  the  banquet  party  rose  and  applauded. 


474  PAN   AMERICAN    FINANCIAL   CONFERENCE. 

RESPONSE  OF  AMBASSADOR  DA  GAMA  TO  THE  TOAST  "  THE 
PRESIDENT  OF  THE  UNITED  STATES." 

MR.  SECRETARY  AND  GENTLEMEN:  On  behalf  of  my  colleagues 
of  the  Latin  American  diplomatic  corps  in  Washington,  I  congratu- 
late you  on  the  success  of  the  Financial  Conference.  To  be  sure,  we 
all  anticipated  the  success,  considering  the  excellence  of  the  delega- 
tions that  our  Governments  sent  to  this  country  and  the  high  profes- 
sional ability  of  the  experts  on  financial,  industrial,  and  commercial 
subjects  invited  by  the  Government  of  the  United  States  to  discuss 
matters  of  common  interest.  There  was  every  probability  that  good 
would  result  from  the  joint  action  of  those  wise,  practical  men  in 
devising  means  of  attaining  their  common  interests — our  common 
interests — but  we  also  considered  that  five  days  were  insufficient  for 
that  getting  together  which  is  essential  to  the  success  of  a  conference 
of  this  kind.  The  greater  and  the  more  grateful  is  our  surprise  on 
seeing  that  the  five  days  of  the  last  week  of  May  were  sufficient  to 
lay  the  foundation  for  an  international  structure  of  such  magnitude. 
This  is  only  a  start,  only  a  beginning — the  start  in  the  movement 
whose  end  we  can  not  guess.  It  has  already  created  great  hopes  and 
aroused  keen  interest  among  our  people. 

To  you,  Mr.  Secretary,  is  due  the  honor  for  having  conceived  the 
happy  idea  of  this  Conference.  Honor  be  to  the  United  States  and  to 
the  American  citizens  who  have  been  working  with  you  to  -further 
this  idea  and  to  give  it  concrete  shape. 

This  is  the  toast  to  the  President  of  the  United  States.  This  is  the 
toast  to  the  American  people.  [Applause.] 

The  banquet  guests  drank  to  the  toast. 

Secretary  McAooo.  In  the  limited  time  at  our  disposal  to-night  we 
have  been  compelled  to  curtail  the  list  of  speakers.  We  were  very 
anxious  to  have  a  representative  of  our  distinguished  guests  speak 
for  them  and  a  member  from  the  United  States  speak  on  their  behalf. 
The  question  was  how  to  choose  these  gentlemen.  We  finally  deter- 
mined to  leave  it  to  our  foreign  guests  to  say  who  should  represent 
them,  and  I  autocratically  selected  somebody  to  represent  the  gentle- 
men from  the  United  States.  It  was  a  most  interesting  result,  because 
I  have  found  that  with  absolute  unanimity  our  foreign  guests  selected 
that  eloquent  gentleman  from  Colombia  who  charmed  this  great 
Conference  the  other  day  with  an  inspired  effort.  It  gives  me  the 
greatest  pleasure,  gentlemen,  to  again  introduce  to  you  the  Honorable 
Santiago  Perez  Triana.  [Applause.] 


BANQUET.  475 

RESPONSE  ON  BEHALF  OF  THE  LATIN-AMERICAN  DELEGATES 
BY  DR.  SANTIAGO  PEREZ  TRIANA. 

MR.  SECRETARY,  YOUR  EXCELLENCIES,  AND  GENTLEMEN  : 

The  Latin  American  delegates  have  done  me  the  high  honor  of 
asking  me  to  speak  in  their  behalf.  I  am  deeply  thankful  for  the  dis- 
tinguished honor.  At  the  same  time  I  realize  the  burden  that  has 
been  placed  upon  my  shoulders,  and  I  bespeak  from  the  Latin 
American  delegates  who  have  accepted  that  responsibility,  from  the 
representatives  of  the  United  States,  and  from  the  illustrious  gather- 
ing here  the  full  measure  of  kindliness  and  forbearance.  We,  the 
Latin  American  delegates,  on  behalf  of  our  peoples  and  our  Govern- 
ments, express  our  warmest  thanks.  We  are  thankful  to  the  Govern- 
ment of  the  United  States  for  having  invited  us  to  this  most  im- 
portant Conference,  and  we  are  also  personally  thankful  for  the 
solicitous  and  untiring  courtesy  which  we  have  met  at  every  step  since 
we  landed  on  this  shore,  and  which  seems  to  constitute,  as  it  were, 
the  national  atmosphere. 

We  must  express  our  thanks,  also,  to  the  Pan  American  Union  and 
to  its  worthy  officers,  who  have  done  so  much  for  us  in  these  days. 
It  has  been  only  a  continuation  of  what  they  have  been  doing  for 
our  countries  in  the  past.  We  must  express  our  sincerest  thanks  to 
the  illustrious  Secretary  of  the  Treasury — and  here  I  am  going  to 
utter  a  wish  which  I  hope,  in  fact  which  I  know,  all  my  fellow  dele- 
gates will  echo,  and  I  wish  that  if  they  do  so,  as  I  know  they  will, 
they  will  say  aye,  and  that  is  that  Secretary  McAdoo  should  come 
as  a  guest  of  our  Republics  as  soon  as  he  can.  [Cries  of  "  aye,"  "  aye," 
"  aye,"  and  applause.] 

I  want  to  say,  on  behalf  of  the  delegates  whom  I  represent  here, 
we  fully  realize  the  transcendent  aims  of  the  Conference,  and  that  no 
effort  will  be  spared  by  our  Governments,  by  our  peoples,  or  by  our- 
selves to  further  those  ends. 

And,  finally,  I  want  to  express  my  thanks  to  the  Cabinet  and  to 
President  Wilson,  whom  we  all  consider  one  of  the  noblest  citizens 
of  mankind  [applause  and  cheers] — a  man,  a  seer,  who  can  see  the 
truths  of  righteousness  and  can  embody  them  in  national  policies. 
[Loud  applause.] 

It  behooves  us  before  parting  to  realize  the  full  significance  of  our 
endeavors  during  the  past  few  days.  The  acts  of  men,  when  taken 
singly  and  isolated,  are  necessarily  meager,  incomplete,  and  limited. 
In  the  course  of  life  they  may  acquire  greatness,  they  may  attain  sub- 
limity, and  at  times  a  higher  essence,  as  of  sanctity. 

Look  at  that  one  quarrying  the  stone  in  the  rock-ribbed  hills  or  at 
him  felling  the  rugged  trunks  in  the  somber  forest.  They  are  simply 


476  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

humble  toilers  of  the  passing  day.  Follow  the  rock  and  the  trunk 
and  see  them  embodied  in  arches  or  in  columns  or  in  the  walls  of  a 
mighty  structure,  serene  and  beautiful,  a  beacon  of  hope  of  enduring 
centuries.  Those  humble  toilers  become  the  joint  artificers  of  the 
glowing  consummation.  We  should  look  at  the  work  that  we  have 
been  trying  to  perform  in  the  light  of  the  aim  that  has  guided  us,  and 
we  need  not  fear  the  analysis.  Our  objective  is  that  the  continents 
of  America  should  be  the  home  of  justice  and  of  liberty.  [Applause.] 
Our  objective  is  that  there  should  be  no  break  in  continuity  fro'm 
latitude  to  latitude,  from  one  country  to  the  other,  and  that  in  the 
uniformity  and  unanimity  of  that  endeavor  should  reside  the  guar- 
antee of  its  continuance  and  the  safeguard  against  the  eternal  menace 
of  extraneous  force.  How  far  this  Conference  has  worked  in  that 
direction  time  will  tell;  but  this  we  know,  that  it  has  brought  its 
share  to  the  permanent  structure  and  that  it  has  paved  the  way  for 
the  future. 

The  generations  of  the  past  did  not  shirk  their  burdens.  Theirs 
it  was  to  explore  and  to  dominate  the  continent  which  loomed  before 
them,  from  conquerors,  from  obstacles  mysterious  and  menacing,  in 
all  the  possibilities  of  the  unknown.  Theirs  it  was  to  evolve  a  new 
life,  in  a  new  land,  of  the  elements  of  tradition  and  of  training — as  it 
were,  the  old  alloy  in  a  new  crucible,  with  new  ingredients  added. 
Theirs  it  was  at  a  later  period  to  sever  the  connection  with  the  parent 
lands.  This  was  more  than  a  political  separation ;  it  was  a  manifes- 
tation of  the  fundamental  incompatibility  that  exists  between  the 
old  life  and  the  new.  At  every  stage  of  their  development  they  faced 
manfully  the  call  of  destiny,  and  in  the  hour  of  travail,  when  they 
were  put  to  the  test  of  violence  against  overwhelming  odds  for  their 
emancipation,  from  the  first  impetus  -in  1775  in  the  north  to  the  last 
stricken  field  in  1824  in  the  south  they  were  never  found  wanting. 
And  the  deeds  of  their  history  live  in  the  memory  of  the  present 
generation,  and  the  calendar  of  their  heroes — Washington,  Bolivar, 
O'Higgins — and  the  myriads  of  their  glorious  companions,  are  the 
symbol  of  patriotism  and  are  handed  from  man  to  man,  from  gen- 
eration to  generation.  [Applause.] 

After  their  independence  came  the  period  of  reconstruction.  Each 
had  its  own  vital  and  intricate  problem.  In  many  parts  gory  vio- 
lence again  reasserted  itself,  as  if  it  were  ordained  that  humanity 
should  not  take  a  step  forward  in  the  path  of  progress  without  blood- 
shed. If  in  the  southern  section  the  era  of  strife  lasted  well-nigh 
for  three-fourths  of  a  century,  the  one  great  conflagration  in  the 
North  gathered  in  four  tragic  years  of  sorrow  and  bloodshed  all  that 
was  needed  and  required  to  vindicate  for  this  Nation  its  name  as  the 
land  of  the  free.  [Applause.] 


BANQUET.  477 

And  thus  we  have  reached  our  day.  Listen  well,  ye  Americans  of 
all  sections  of  this  hemisphere.  Look  well  to  it  and  see  where  your 
duty  lies,  and  try  to  perform  it  as  your  forefathers  performed  theirs, 
for  you  have  a  weight  of  great  importance  and  of  glory  upon  your 
shoulders  which  is  not  only  an  incomparable  boon,  but  which  also 
entails  sacred  obligations. 

It  is  a  current  idea,  one  of  the  many  truisms  that  are  false,  that  his- 
tory repeats  itself;  nations  grow,  expand,  and  reach  a  glorious 
maturity  and  decay  and  disappear.  Babylon  and  Egypt,  Greece  and 
Rome,  and  all  the  empires  of  the  later  day  are  used  to  confirm  this 
dictum.  Yet  it  is  our  privilege  for  the  men  of  this  continent  and  this 
generation  to  give  the  lie  to  the  accepted  dictum  of  history.  We  are 
laboring  in  the  light  of  a  sun  that  knows  no  setting.  The  free 
republics  of  this  continent  will  form  in  a  cluster  an  empire  without 
an  emperor.  The  empires  of  the  past  carried  in  them  from  their 
birth  the  germ  of  perdition,  for  there  was  inequality  and  there  was 
oppression,  and  inequality  kills  the  nation  as  a  deadly  poison  kills 
the  man.  Our  nations  are  free,  and  they  shall  live  wedded  to  liberty 
so  long  as  they  remain  loyal  and  faithful  to  the  principles  of  democ- 
racy inscribed  on  the  threshold  of  their  history,  and  so  long  as  they 
remember  that  eternal  vigilance  is  the  price  of  liberty.  [Applause.] 

And  here,  for  all  can  not  be  roseate — and  he  would  not  be  the  real 
friend  of  mankind  who  solely  pointed  to  the  dawn,  forgetting  that 
there  is  darkness  to  prepare  for — here,  I  say,  let  me  remind  you  again, 
fellow  Americans,  of  two  fundamental  sources  of  danger  which  we 
must  watch  so  as  to  avoid.  Two  dangers  that  might  menace  our  .con- 
tinent are  the  excess  of  power,  running  to  predatory  imperialism,  and 
abuse  of  sovereignty.  Imperialism  grows  apace  with  the  conscious- 
ness of  power.  It  is  sporadic  and  it  may  grow  in  any  part  of  our 
continent.  Do  not  listen  to  its  counsels  and  avoid  it,  for  therein  lies 
the  death  of  liberty.  [Applause.] 

Sovereignty  entails,  in  the  very  conditions  of  its  being,  moral  ob- 
ligations. When  those  moral  obligations  are  forgotten,  set  aside,  and 
trampled  under  foot,  the  claim  of  sovereignty  can  no  longer  exist. 

Apropos  of  this,  permit  me  to  remind  you  of  a  page  of  Flaubert  in 
his  Salambo.  In  the  intermost  sanctuary  of  the  temple  there  stood 
the  statue  of  the  goddess  Danite.  She  was  enveloped  in  a  mantle  of 
golden  tissue,  radiant  with  costly  stones.  It  was  a  deadly  sin  to  set 
eyes  upon  the  mantle,  and  to  touch  it  meant  instant  death.  A  soldier 
in  the  army  that  lay  besieging  the  city  at  the  time  of  the  narrative 
penetrated  into  the  sanctuary,  seized  the  veil,  cast  it  over  his  shoulder, 
and  walked  unharmed  through  the  terrified  and  helpless  multitude, 
protected  by  the  investiture  which  had  thus  become  a  cloak  of  crime. 

The  mantle  of  liberty  .that  should  protect  the  whole  continent,  the 


478  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

mantle  of  liberty  that  should  insure  each  and  every  sovereignty, 
should  never  be  a  cloak  of  immunity  for  misery  and  crime.  It  will 
be  asked  what  lessons  are  to  be  learned,  what  are  we  to  do  ?  I  say, 
"  Look,  and  ye  shall  find,"  and  you  will  reply  it  is  not  stated  what  is 
to  be  done  in  the  rules  that  have  been  accepted;  but  I  tell  you  that 
no  human  rule  can  measure  all  of  the  possibilities  of  the  future. 
But  when  such  an  occasion  shall  arise,  seek  and  you  shall  find. 

Let  us  achieve  prosperity  and  health,  for  in  material  prosperity 
there  is  health,  even  as  it  happens  that  the  healthy  body  houses  the 
healthy  mind.  In  material  comfort  you  will  find  the  development  of 
moral  ideals.  But  of  all  things  let  that  be  the  highest  aim  of  our  en- 
deavors; let  us  keep  in  touch  with  the  treasure  of  our  moral  ideals, 
and  let  us  see  that  those  ideas  and  the  ideals  which  incarnate  them 
become  each  day  more  comprehensive  and  more  charitable.  And  let 
us  remember  -that  the  suppression  of  moral  ideals  would  plunge 
humanity  into  darkness,  but  that  if  we  were  to  destroy  whatever  the 
hand  of  man  has  created,  churches  and  railroads  and  viaducts,  and 
the  magnificent  works  of  art  and  of  commerce,  and  all  the  properties 
of  this  stage  of  human  life,  and  were  yet  to  leave  the  human  con- 
science in  possession  of  its  treasure  of  moral  principles,  we  might  still 
dwell  in  the  assurance  that  prosperity  would  return  and  humanity 
would  see,  as  it  were,  a  new  springtime,  the  blossoming  of  happiness. 
[Applause.] 

I  believe  that  we  must  steer  our  course  by  these  bright  stars  of 
hope — that  that  is  the  gospel  we  must  preach  to  all  nations,  and  that 
in  this  respect,  at  least,  I  may  have  managed  to  interpret  the  feelings 
of  my  fellow  delegates. 

Fellow  Americans,  we  leave  you  comforted  and  fortified.  In  the 
great  task  that  lies  before  us  we  know  that  you  will  do-  your  share, 
and  you  may  rely  upon  it  that  we  of  the  southern  Republics  will  do 
ours  in  full  earnestness  arid  sincerity  of  purpose,  and  may  God  be 
with  all  of  us.  [Great  and  prolonged  applause.] 

Secretary  McAooo.  Gentlemen,  I  now  desire  to  introduce  to  you  a 
great  international  lawyer  and  a  distinguished  citizen  who  will  speak 
for  the  United  States,  the  Honorable  John  Bassett  Moore. 

RESPONSE  ON  BEHALF  OF  THE  UNITED  STATES  REPRESENTA- 
TIVES BY  THE  HON.  JOHN  BASSETT  MOORE. 

MR.  SECRETARY  AND  GENTLEMEN  : 

A  very  grateful  task  has  been  committed  to  me  this  evening  in 
undertaking  to  express  the  sentiment  of  the  American  representatives 
in  this  Conference.  In  performing  its  function  I  may  be  permitted 
briefly  to  trace  the  development  of  the  idea  of  Pan  Americanism. 


BANQUET.  479 

• 

It  is  just  one  hundred  years  ago  that  Bolivar,  who  was  then  living 
in  exile  and  poverty  in  Kingston,  Jamaica,  wrote  the  celebrated  pro- 
phetic letter  in  which  he  undertook  to  foreshadow  the  future  of  the 
countries  of  America  then  struggling  for  independence  and  liberty. 
Their  future  was  then  uncertain.  They  were  passing  through  trials 
and  tribulations  the  result  of  which  no  man  certainly  could  foresee; 
but  with  prophetic  vision  he  undertook  to  predict  the  triumph  of  the 
cause  in  which  they  were  then  engaged.  Five  years  later  a  great 
statesman  of  this  country,  Henry  Clay,  who  had  been  a  warm  advo- 
cate of  the  cause  of  the  Spanish-American  colonies,  proposed  the 
formation  of  an  American  human-freedom  league.  The  league  which 
he  proposed  was  based  not  so  much  on  the  idea  of  material  interest 
as  upon  the  idea  of  a  solidarity  of  American  interest,  resting  upon 
an  identity  of  fundamental  political  principles.  It  was  not  so  much 
the  idea  of  force  as  it  was  the  idea  of  the  triumph  of  moral  influences, 
the  power  of  example,  the  power  of  ideas,  of  great  thoughts  that 
appealed  to  the  common  sentiments  of  the  peoples  of  America.  In 
1822  there  came  the  recognition  of  the  independence  of  the  various 
American  countries  by  the  Government  of  the  United  States.  This 
recognition  had  scarcely  been  given  when  their  independence  was 
threatened  by  a  combination  of  the  European  powers  for  the  restora- 
tion of  those  countries  to  a  colonial  condition.  It  was  then  that  the 
great  American  statesman,  James  Monroe  [applause] ,  framed  the  doc- 
trine which  has  since  become  one  of  the  fundamental  principles^- 
indeed,  it  may  be  said  the  chart  and  the  guide  of  those  American 
countries.  As  is  well  known,  what  is  commonly  called  the  Monroe 
Doctrine  was  formulated  by  John  Quincy  Adams,  who  was  then 
Monroe's  Secretary  of  State.  In  his  musings  on  this  subject  Adams's 
thoughts  took  this  direction.  He  said  that  the  American  countries 
as  independent  nations  had  the  right  to  dispose  of  their  own  destiny. 
We  had  no  right  to  dispose  of  it ;  Europeans  had  no  right  to  dispose 
of  it.  They  alone  possessed  the  right  to  say  what  their  future  should 
be;  and,  as  an  eloquent  Argentine  orator  several  years  ago  at  the 
Fourth  International  Congress  expressed  it,  it  was  then  that  these 
countries  which  had  won  their  independence  by  their  own  efforts  and 
sealed  their  liberties  with  their  blood  had  thrown  about  them  the 
shield  of  the  protection  of  the  United  States.  [Applause.] 

The  term  "  Monroe  Doctrine  "  has  not  always  been  a  phrase  with 
which  to  conjure.  There  have  been  different  and  varient  interpreta- 
tions of  that  doctrine,  sometimes  not  always  agreeable  to  our  breth- 
ren; but  in  this  original  sense  of  mutual  cooperation,  in  the  mainte- 
nance of  the  independent  countries  of  America  devoted  to  the  cause 
of  liberty,  there  has  never  been  any  diversity  of  sentiment  among  the 
American  countries. 


480  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

• 

It  was  my  good  fortune  only  three  years  ago  to  attend,  as  the 
delegate  from  the  United  States,  the  first  of  what  is  called  the  Inter- 
national Commission  of  Jurists  to  codify  international  law  for  the 
American  countries,  and  the  building  in  which  we  held  our  sessions 
was  that  beautiful  structure  called  the  Monroe  Palace,  situated  on 
the  magnificent  harbor  of  Rio  de  Janeiro. 

In  1826  there  came  the  Pan  American  Congress,  which  was  sug- 
gested by  the  author  of  the  prophetic  letter  to  which  I  referred  a 
moment  ago — Bolivar.  The  Government  of  the  United  States  ap- 
pointed delegates  to  that  Congress;  but  as  the  result  of  a  difference 
of  opinion  in  our  national  councils  as  to  what  the  attitude  of  the 
United  States  should  be  or  as  to  the  extent  to  which  it  should  inter- 
fere in  the  affairs  of  other  countries  the  American  delegates  were 
late  in  arriving,  and,  as  a  matter  of  fact,  the  Congress  had  adjourned 
when  they  reached  Panama.  But  the  idea  embodied  in  the  pro- 
posal of  Bolivar,  which  resulted  in  that  Congress,  was  destined  not 
to  perish.  It  was  expected  after  the  Panama  Congress  was  held 
that  another  international  American  congress  would  take  place  at 
Tacubaya,  in  Mexico.  For  certain  reasons,  in  which  it  is  unneces- 
sary now  to  enter,  that  congress  was  not  held.  From  that  time  on 
for  a  number  of  years  the  idea  of  Pan  Americanism,  of  Pan  Amer- 
ican ideals,  and  Pan  American  sympathies  underwent  an  eclipse. 
This  fact  was  due  to  certain  conditions  that  existed  in  this  country, 
also  to  conditions  of  domestic  disorder  which  prevailed  in  the  coun- 
tries of  Latin  America. 

A  great  American  historian  has  described  the  earlier  days  of  the 
history  of  the  United  States  as  being  the  critical  period  of  American 
history.  These  countries,  the  Latin  American  States,  also  were  re- 
quired to  pass  through  the  critical  period  of  their  history ;  but  during 
this  time,  unfortunately,  because  of  conditions  here  as  well  as  there, 
they  seemed  to  drift  apart  until  they  had  reached  a  condition  which 
was  described  in  a  story  told  of  a  certain  island,  celebrated  in  poetry 
and  in  song,  where  dissension  was  prevalent  and  discord  seemed  to 
reign.  A  foreigner,  speaking  to  a  native  of  this  island,  on  a  certain 
occasion  said,  "  Why  is  it  that  you  have  so  many  discords  ?  "  "  Well," 
he  replied,  "  there  are  Protestants  in  the  north  and  there  are  Catholics 
in  the  south,  and  they  are  always  wrangling.  If  the  inhabitants 
were  all  agnostics,  they  would  live  together  like  Christians." 
[Laughter  and  applause.] 

Gentlemen,  that  story  denotes  the  condition  in  which  people  are 
prone  to  dwell  upon  their  differences  and  not  upon  the  qualities 
which  may  tend  to  bring  them  together.  In  other  words,  they  dwell 
upon  their  defects  rather  than  upon  their  virtues.  But  a  great 
change  was  destined  to  come.  The  civil  conflict  which  raged  in  this 
country  from  1861  to  1865  taught  our  people  that  there  was  no 


BANQUET.  481 

nation  that  was  exempt  from  the  possibilities  of  civil  disturbance. 
Humility  is  the  gateway  to  knowledge.  Our  own  misfortunes  have 
made  us  more  sympathetic  with  the  misfortunes  of  others.  It  pro- 
duced here  a  radical  change  in  our  attitude  toward  our  brethren  of 
the  other  countries  of  America,  and  from  that  time  there  have  been 
manifest  a  sympathy  and  a  toleration  and  a  desire  for  cooperation 
which  had  not  existed  before.  One  of  the  first  signs  of  that  change 
of  attitude  was  the  peace  conference  held  in  Washington  in  1870  to 
bring  about  peace  between  Spain  and  the  countries  on  the  west  coast 
of  South  America  with  which  she  had  been  at  war.  That  confer- 
ence was  presided  over  by  a  great  Secretary  of  State — Hamilton 
Fish — and  resulted  in  the  conclusion  of  what  was  called  a  perpetual 
armistice,  under  which  the  conflict  was  brought  to  an  end. 

Without  tracing  step  by  step  the  development  of  this  later  and  bet- 
ter policy,  I  may  refer  to  the  assembling  in  this  city  of  the  first  In- 
ternational American  Conference  in  1889.  I  suppose  it  is  one  of  the 
signs  of  advancing  age  to  indulge  in  reminiscence.  It  was  my  good 
fortune  to  be  present  at  the  meeting  of  the  first  International  Ameri- 
can Conference  in  1889  and  from  time  to  time  to  contribute  to  its 
labors.  Without  entering  minutely  into  the  results  of  that  confer- 
ence I  will  refer  to  just  two  things  that  were  accomplished.  The 
first  was  the  formation  of  the  Pan  American  Union.  We  meet  here 
this  evening  in  this  magnificent  building  which  stands  as  a  monu- 
ment to  the  initiators  of  the  first  International  American  Congress. 
It  represents  also  the  consummation  of  the  thought  to  the  promotion 
of  which  they  dedicated  their  efforts.  Another  act  of  that  conference 
was  the  adoption  of  a  plan  of  arbitration.  This  plan  was  in  advance 
of  its  time,  and  for  that  reason  failed  to  receive  the  approval  of  the 
governments  concerned  and  never  was  carried  into  effect.  But  it 
has  stood  before  the  peoples  of  the  Americas  from  that  time  to  this 
as  an  ideal  and  an  inspiration,  and  a  long  step  toward  its  complete 
fulfillment  has  been  taken  in  the  making  of  these  peace  agreements 
which  have  been  initiated  and  carried  out  by  our  Secretary  of  State 
who  is  with  us  this  evening.  [Applause.] 

More  than  that,  at  this  very  Conference  in  which  we  have  been 
taking  part  there  has  been  adopted  with  unanimity  the  proposal  to 
apply  the  principle  of  arbitration  to  the  adjustment  of  commercial 
disputes.  [Applause.] 

There  has  been  a  great  deal  said  from  time  to  time  as  to  the  possi- 
bilities of  Pan  Americanism,  and  as  to  how  far  it  was  a  matter  of  sub- 
stance, and  how  far  it  was  a  matter  purely  of  sentiment.  Now,  for 
my  part,  I  do  not  draw  any  sharp  line  of  demarcation  between  mat- 
ters of  substance  and  matters  of  sentiment,  because  I  believe  that  his- 
tory teaches  us  that  the  one  is  as  important  as  the  other.  But  there 
98257°— 15 31 


482  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

existed  in  the  development  of  the  material  side  of  Pan  Americanism 
in  former  times  certain  serious  obstacles  in  the  United  States.  The 
failure  to  carry  out  certain  Pan  American  plans  was  not  due  so  much 
to  any  disinclination  to  advance  the  cause  of  Pan  Americanism  as  it 
was  to  the  existence  of  certain  conditions  that  form  an  obstacle  to 
that  development.  One  of  those  conditions  was  that  the  United 
States  down  to  a  very  recent  time  was  largely  a  borrowing  nation. 
It  has  not  been  so  very  many  years  since  the  majority  of  the  stock  of 
one  of  our  large  eastern  railway  systems  was  owned  abroad,  and  a 
very  considerable  minority  interest  in  another  great  eastern  railway 
system  was  likewise  owned  abroad.  I  may  refer  to  the  Foreign  Rela- 
tions of  the  United  States,  that  most  authentic  publication,  as  au- 
thority for  my  statement. 

But  those  conditions  have  changed.  Little  by  little  we  have  ceased 
to  be  a  borrowing  nation  on  so  large  a  scale ;  until  within  the  past 
few  days  the  governor  of  the  board  of  our  reserve  system  has  just 
lifted  a  little  of  the  veil  and  disclosed  the  enormous  accumulation  of 
capital  reserves  in  the  United  States.  Another  obstacle  was  this: 
Our  people  were  much  occupied,  you  may  say  almost  exclusively 
occupied,  in  the  development  and  enjoyment  of  the  great  domestic 
market  which  we  had  here  at  home,  in  which  they  conducted  busi- 
ness at  a  larger  profit  and  with  less  credit  than  they  could  conduct 
it  with  a  foreign  nation.  That,  too,  has  changed  the  development 
of  our  industries  and  has  created  a  great  surplus  for  exportation. 
That  was  foreseen  some  years  ago  in  the  effort  to  dispose  of  our 
surplus  products  by  means  of  reciprocity  treaties.  So  that  we  have 
come  now  into  a  situation  where,  as  a  result  of  changed  conditions, 
we  take  a  more  active  interest  and  can  take  a  more  effective  interest 
in  the  development  of  foreign  commerce  and  in  the  extension  to  other 
nations  of  the  aid  of  our  financial  resources.  It  is  sometimes  said 
that  commerce  is  war.  Gentlemen,  I  must  repudiate  the  theory  that 
the  consumption  of  products  is  to  be  increased  by  the  killing  off  of 
the  consumer.  It  is  a  wholly  erroneous  idea  that  commerce  is  to  be 
conducted  on  the  lines  of  hostility.  That  thought  may  have  done 
very  well  in  the  days  of  colonial  monopoly,  which  continued  down 
through  the  first  third  of  the  last  century,  but  in  the  present  age 
commerce  should  be  regarded  not  as  a  matter  of  warfare  but  as  a 
matter  of  mutual  exchange  of  benefits.  Commerce  consists  in  the 
exchange  of  commodities.  A  produces  enough  for  himself  and  a 
surplus.  He  wishes  to  dispose  of  that  surplus  to  his  neighbor.  He 
creates  enough  of  a  certain  article  for  himself  and  has  a  surplus. 
He  wishes  to  dispose  of  that  to  his  neighbor.  Now  in  that  exchange 
there  is  mutual  benefit.  There  is  no  injury  involved.  So  that  we 


BANQUET.  483 

have  reason  above  the  old  conception  that  commerce  is  to  be  con- 
ducted on  the  lines  of  warfare,  to  the  higher  and  nobler  conception 
that  commerce  is  to  be  regarded  as  a  transaction  which  is  essentially 
the  exchange  of  mutual  benefits.  The  idea  for  which  we  stand 
to-day,  and  for  which  I  may  say  the  American  delegation  in  this 
Conference  stands  to-day,  is  that  our  commercial  relations,  that  the 
great  design  of  our  commercial  relations,  is  the  establishment  of  a 
condition  of  mutual  prosperity,  of  mutual  content,  or  mutual  justice 
between  man  and  man  and  between  nation  and  nation.  [Applause.] 

Our  hope  and  our  aspiration  is  that  these  exchanges  which  we 
desire  to  promote  and  facilitate  shall  result  in  the  establishment  of  a 
condition' of  good  fellowship.  An  illustrious  traveler,  a  good  friend 
of  this  country  and  of  the  other  countries  of  America  also,  in  a 
work  published  a  year  or  two  ago,  said  that  there  seemed  to  be 
something  misleading  in  the  use  of  the  word  "American."  His  idea 
was  that  the  use  of  this  term  had  led  us  to  assume  that  there  existed 
an  identity  of  interests  which  really  did  not  exist. 

Now,  this  idea  of  America  being  not  simply  a  geographical  term 
but  a  term  representing  a  community  of  interests,  has  existed  so 
long,  that  there  is  a  fair  presumption  that  it  is  not  a  term  that  mis- 
leads us,  but  a  term  that  is  thoroughly  and  persistently  leading  us 
in  the  right  direction.  [Applause.] 

The  word  "America,"  beginning  in  the  early  part  of  the  last  century 
during  the  struggles  of  our  neighbors  for  independence,  represented 
the  idea  of  the  community  of  political  interests  in  which,  as  Henry 
Clay  said,  we  would  be  regarded  as  standing  together  for  the  estab- 
lishment of  the  human  freedom  league;  and  this  idea  has  now  ad- 
vanced, until  to-day  we  are  undertaking  to  establish  a  community  of 
interests  with  regard  to  all  our  activities.  The  great  significance  of 
this  Conference,  called  by  the  Secretary  of  the  Treasury,  lies  in  the 
fact  that  it  represents  the  last  page  in  this  development. 

Identity  of  political  interests  we  have  and  have  had  for  many 
years.  We  now  proceed  to  make  the  circuit  complete  by  estab- 
lishing the  identity  of  our  material  interests  on  the  broad  basis  of 
justice,  contentment,  and  good  fellowship.  This  is  what  the  word 
"America"  stands  for;  this  is  what  we  want  to  make  the  word 
"America  "  continue  to  stand  for ;  and  in  saying  this  I  affirm  with 
all  confidence  that  I  speak  for  the  hopes  and  the  aspiration  of  the 
American  delegation  to  this  Conference.  [Loud  applause.] 

Secretary  McADOO.  Gentlemen,  in  your  generosity  you  have  ac- 
corded to  me  praise  that  I  do  not  deserve.  I  make  the  confession 
because  the  secret  service  is  located  in  the  Treasury  Department, 
and  they  might  discover  the  truth  and  turn  upon  me. 


484  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

There  are  two  men  here  who  deserve  the  greatest  possible  praise 
for  the  success  of  this  Conference,  and  I  want  to  ask  them  to  say 
a  word  to  you.  These  men  are  the  Honorable  Andrew  J.  Peters, 
Assistant  Secretary  of  the  Treasury  [applause] ,  and  Dr.  L!  S.  Rowe, 
your  efficient  Secretary-General.  [Applause.] 

I  do  not  find  words  to  express  the  loyalty,  faithfulness  and  de- 
votion which  these  two  gentlemen  have  brought  to  bear  upon  the 
task  which  has  been  committed  to  them. 

I  shall  now  ask  Mr.  Peters  if  he  will  not  say  a  few  words  to  the 
audience.  [Applause.] 

SPEECH  OF  HON.  ANDREW  J.  PETERS,  ASSISTANT  SECRETARY 

OF  THE  TREASURY. 

MR.  SECRETARY,  FELLOW  CITIZENS  OF  THIS  GREAT  HEMISPHERE,  AND  GEN- 
TLEMEN : 

We  are  here  to-night  at  the  close  of  this  Conference  to  have  one  last 
meeting  together,  then  to  separate  to  our  homes.  I  appreciate  the 
opportunity  which  the  Secretary  is  giving  me  to  say  a  few  words  to 
you  and  to  tell  you  what  a  pleasure  it  has  been  to  be  associated  with 
this  Conference. 

The  members  of  the  Conference  have  one  and  all  met  in  a  spirit 
of  cooperation  and  of  interest  toward  a  common  end.  There  has 
been  no  seeking  for  individual  ends,  but  the  Conference  has  distin- 
guished itself  by  a  spirit  of  intense  cooperation,  each  striving  with 
the  others  to  help  accomplish  the  common  object  of  our  meeting. 

In  past  years  there  has  been  a  woeful  lack  of  understanding  in 
this  country  as  to  the  great  undeveloped  resources  in  the  sister 
Republics.  With  our  vast  country,  which  has  needed  the  efforts  of 
our  citizens,  we  have  devoted  almost  all  of  our  energies  toward  the 
development  of  our  own  country  and  have  given  but  little  thought 
or  attention  to  the  situation  in  our  neighboring  Republics.  To-day 
we  find  in  the  United  States  a  broader,  more  liberal,  and  wider  view 
and  a  greater  interest.  [Applause.] 

Lack  of  knowledge  breeds  suspicion  and  jealousy.  A  better  knowl- 
edge and  a  better  understanding  is  the  surest  foundation  upon  which 
mutual  advantage  and  mutual  fellowship  can  be  based.  I  do  not 
believe  our  meeting  to-night  is  the  end;  I  do  not  believe  what  we 
have  all  seen  accomplished  this  week  is  the  completion  of  this  Confer- 
ence. We  are  not  at  the  end;  we  are  at  the  beginning,  and  I  predict 
that  we  will  see  spring  from  this  Conference  a  permanent  organiza- 
tion, strong  in  its  ideals,  firm  in  its  purposes,  which  will  tend  to 
develop  and  bring  together  the  people  in  these  sister  Republics  of 
the  Western  Hemisphere,  so  that  as  each  year  goes  by  there  will  be 
a  better  and  a  truer  understanding  of  our  people  and  a  better  and  a 
truer  cooperation  between  their  citizens.  [Applause.] 


BANQUET.  485 

This  desire  for  a  clearer  understanding  is  not  a  selfish  thing.  We 
do  not  mean  by  our  relations  with  our  neighbors  that  they  should  be 
used  for  exploitation.  The  only  true  advantage  of  commerce  is  a 
mutual  benefit  and  exchange  of  commodities  to  the  profit  both  of  the 
seller  and  of  the  purchaser.  One  nation  can  not  sell  unless  it  buys 
from  its  customer  in  return,  and  it  is  to  promote  these  objects,  it  is 
to  promote  the  commerce  between  these  Republics  of  the  hemisphere 
of  the  west  that  we  are  meeting  here  at  this  time. 

Mr.  Secretary,  it  has  been  a  great  pleasure,  indeed,  to  serve  under 
your  interest  and  direction  in  this  work.  Each  day  we  have  had 
the  opportunity  of  learning  much  of  the  views  and  of  the  interests 
of  our  neighbors.  Each  time  that  we  have  met  I  believe  that  every- 
one obtained  a  better  and  more  complete  understanding  of  the  con- 
ditions of  the  respective  countries. 

When  I  was  first  sent  for  by  the  Secretary,  who  at  that  time  was 
suffering  from  a  severe  illness,  he  told  me  to  take  charge  of  the  pro- 
ceedings and  to  see  what  our  guests  wished  and  then  supply  it.  And 
if  you  have  found  that  our  hospitality,  which  we  have  extended  with 
so  much  pleasure,  has  been  in  any  way  wanting,  the  blame  rests  with 
me  [applause],  because  I  was  selected  to  make  every  effort  for  your 
comfort  while  you  were  here.  In  carrying  out  the  arrangements  for 
this  Conference  we  all  owe  a  great  debt  of  gratitude  to  one  of  our 
friends  who  is  here  to-night — to  Dr.  Rowe — whose  interest,  whose 
unselfish  efforts,  and  whose  time  and  thoughts  have  been  given  whole- 
heartedly to  the  work  here,  and  I  now,  sir,  convey  to  you  the  feelings 
of  everyone  in  this  hall  when  I  say  we  are  deeply  grateful  to  you. 
[Applause.] 

To  Mr.  Sands,  to  Mr.  Miles,  to  Mr.  Gittings,  to  Mr.  Parker,  and 
to  Mr.  Heinl,  who  each  and  every  one  of  them  have  given  unstinted 
measure  of  their  efforts  to  the  arrangements,  we  owe  a  great  debt 
of  thanks,  and  whatever  success  has  been  accomplished  in  carrying 
out  the  program  of  your  entertainment  is  due  to  their  devotion  and 
to  their  interest  each  day. 

It  would  be  a  lack  of  courtesy  for  me  to  take  advantage  of 
my  present  position  to  trespass  on  your  time;  but  I  wish  to  say 
to  you,  sirs,  to  you  delegates  from  our  sister  Republics,  that  you  have 
done  us  an  inestimable  favor  by  coming  here ;  you  have  obtained  our 
point  of  view,  and  you  have  given  us  a  basis  for  a  clearer  and  more 
accurate  and  friendly  understanding  of  all  problems  which  we  face. 
In  giving  up  your  time,  in  making  the  long  and  in  many  cases  the 
tiresome  journey  to  this  country,  you  have  performed  a  public  serv- 
ice for  which  the  citizens  of  both  continents  of  America  should  be 
grateful.  And  to  you,  gentlemen,  to  you  American  guests  here,  busi- 
ness men  whose  lives  are  full  of  interest  which  you  have  put  aside 


486  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

to  come  here  to  this  Conference,  we  owe  a  debt  of  gratitude  also. 
A  nation  can  not  progress  unless  it  possesses  the  interest  and  the 
patriotism  of  its  people.  To  make  this  Conference  a  success,  to  make 
it  the  foundation  for  the  future  on  which  we  believe  it  rests,  we  must 
have  the  interest  and  cooperation  of  American  citizens.  You  have 
done  a  patriotic  service  by  coming  here,  and  no  matter  how  great 
your  measure  of  sacrifice  you  can  feel  that  you  have  added  something 
of  benefit  by  attending  and  giving  us  your  work  and  serving  this 
week  with  us  here  in  Washington.  [Applause.] 

For  myself,  if  I  may  add  a  word,  it  has  been  a  week  of  infinite 
interest  and  of  great  pleasure.  It  has  formed  friendships  which 
I,  for  my  part,  believe  will  always  exist.  We  have  met  you,  strangers 
to  our  shores,  and  established  ties  which  will  forever  bind  us  to- 
gether and  which  will  forever  in  our  minds  bind  j^our  countries  to 
the  United  States. 

I  believe  that  this  Conference  has  accomplished  much,  and  I  think 
that  when  we  separate  we  can  go  with  the  consciousness  that  in  meet- 
ing together  here,  knowing  and  consulting  one  another,  we  have  taken 
a  step  forward  which  will  inure  to  the  benefit  of  many  peoples,  and 
to  the  health,  happiness,  and  contentment  in  the  national  lives  of 
all  dwellers  in  all  of  the  Republics  of  the  Western  Hemisphere. 
[Prolonged  applause.] 

Secretary  McAooo.  Gentlemen,  I  now  have  the  great  pleasure  of 
introducing  to  you  Dr.  Leo  S.  Rowe,  the  Secretary- General  of  the 
Conference.  [Applause.] 

SPEECH  OF  DR.  LEO  S.  ROWE. 

(Dr.  Rowe  spoke  in  Spanish  as  follows:) 

MR.  SECRETARY  AND  GENTLEMEN  OF  THE  CONFERENCE:  Permit  me 
first  to  express  my  wrarm  appreciation  to  all  the  delegates  for  the 
hearty  and  enthusiastic  cooperation  that  they  have  given  me  in  the 
work  of  this  Conference.  It  has  been  my  good  fortune  to  attend  a 
number  of  international  congresses,  but  I  know  of  none  in  which  each 
and  every  delegate  has  been  imbued  with  so  deep  a  sense  of  public 
obligation  and  so  high  a  concept  of  the  important  mission  which  he 
has  been  called  upon  to  perform.  For  your  generous  indulgence  and 
in  overlooking  any  shortcomings  in  the  conduct  of  the  Secretary-Gen- 
eral's office,  you  have  my  deep  and  heartfelt  thanks. 

These  have  been  happy  days  for  me,  in  some  respects  the  happiest 
of  my  life,  for  I  have  had  the  feeling,  as  never  before,  that  we  are  at 
the  beginning  of  a  new  epoch  in  the  international  relations  of  the 
American  continents.  I  begin  to  see  coming  to  full  fruition  a  new 


BANQUET.  487 

concept  of  international  relations,  one  built  upon  the  idea  of  coopera- 
tion and  mutual  benefit  rather  than  of  rivalry  and  jealousy. 

Important  as  have  been  the  questions  presented  to  this  Conference, 
I  can  not  help  but  feel  that  its  significance  is  far  deeper  than  the 
questions  included  in  the  program.  It  is  an  inspiring  spectacle  that 
may  well  arouse  the  enthusiasm  of  every  patriotic  citizen  to  realize 
that  at  a  time  when  hatreds  and  antagonisms  are  dominating  so 
great  a  part  of  the  western  world,  the  Republics  of  America  assemble 
in  a  spirit  of  mutual  helpfulness  to  take  counsel  of  one  another  and 
to  devise  ways  and  means  through  which  they  can  promote  the  spirit 
of  union  and  cooperation. 

Viewed  from  the  broadest  possible  standpoint,  it  means  that  the 
great  mission  of  the  Republics  of  the  American  hemisphere  is  coming 
to  full  fruition.  We  may  well  rejoice  at  this  great  privilege  of  giv- 
ing to  the  world  at  a  critical  moment  an  example  of  international 
solidarity.  A  new  note  has  been  struck  in  international  relations, 
which  can  not  help  but  resound  throughout  the  civilized  world. 

I  am  free  to  confess  that  my  enthusiasm  is  not  aroused  by  the 
mere  thought  of  belonging  to  a  country  covering  a  vast  area  or 
containing  one  hundred  or  two  hundred  millions  of  inhabitants, 
but  it  is  my  ambition  that  the  country  to  which  I  belong  shall  be 
a  leader  in  setting  a  new  standard  in  international  relations  and 
will  give  to  the  world  a  new  idea,  namely,  that  its  own  welfare, 
its  own  greatness,  its  significance  in  the  onward  march  of  civiliza- 
tion depends  and  is  in  direct  ratio  with  the  service  which  it  is  able 
to  perform  to  other  nations,  and  particularly  to  its  sister  Republics 
of  America. 

Important  and  far-reaching  as  is  the  significance  of  this  Confer- 
ence, its  full  and  final  import  can  only  be  judged  in  that  larger  per- 
spective in  which  loom  up  the  successive  steps  toward  the  goal  of 
Pan  American  solidarity. 

Permit  me  in  closing,  Mr.  Secretary,  to  thank  you  for  the  honor 
you  have  done  me  in  selecting  me  to  assist  you  in  this  great  work. 

Let  me  also  take  this  opportunity  to  thank  the  governing  board 
of  the  Pan  American  Union  for  their  generosity  in  placing  all  the 
facilities  of  this  magnificent  building  at  the  service  of  the  Confer- 
ence. I  also  wish  to  express  my  special  appreciation  to  the  Director 
General  of  the  Pan  American  Union,  the  Honorable  John  Barrett, 
whose  remarkable  and  efficient  executive  direction  has  made  possible 
the  arrangements  for  the  sessions.  Finally,  I  desire  to  say  a  word  of 
the  deepest  appreciation  to  the  Honorable  Andrew  J.  Peters,  Assist- 
ant Secretary  of  the  Treasury,  for  his  self-sacrificing  and  self-effac- 
ing devotion  to  the  work  of  this  Conference,  and  also  to  the  four 
assistant  secretaries  general  and  to  the  nineteen  group  secretaries, 


488  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

without  whose  aid  it  would  have  been  impossible  to  conduct  the  work 
of  the  Secretary- General's  office. 

I  close  with  a  deep  sense  of  gratitude  to  you  all,  and  drink  to  the 
health  and  prosperity  of  every  member  of  this  historic  Conference. 
[Loud  and  prolonged  applause.] 

Secretary  McADOO.  Gentlemen,  there  is  just  one  more  brief  speech 
to  which  I  wish  you  to  listen.  As  our  foreign  guests  landed  on  the 
soil  of  New  York  City — and  most  of  them  landed  there,  I  believe — 
they  were  met  by  a  committee,  at  the  head  of  which  was  Honorable 
Dudley  Field  Malone.  I  know  that  he  made  you  feel  the  warmth 
and  genuineness  of  the  hospitality  of  this  country.  [Applause.] 

SPEECH  OF  HON.  DUDLEY  FIELD  MALONE. 

MR.  SECRETARY  AND  GENTLEMEN  OF  THE  PAN-AMERICAN  FINANCIAL 
CONFERENCE  :  This  is  not  my  idea  of  a  good  time  to  make  a  speech. 
I  have  a  friend  in  New  York  who  has  varying  ideas  about  the  proper 
length  of  an  after-dinner  speech.  He  is  of  Irish  origin  and  is  always 
of  course  entitled  to  free  speech,  and  he  has  said  that  any  place  in  a 
speech  is  a  good  place  to  stop,  and  that  if  an  egg  be  bad,  one  taste  is 
enough.  There  is  a  wisdom  in  those  thoughts  at  this  hour  of  the 
evening. 

When  I  first  heard  of  the  completion  of  the  Panama  Canal  I  was 
in  very  grave  doubt  as  to  whether  or  not  it  was  to  convey  us  and 
our  sister  Republics  a  benefit  or  a  disadvantage,  because  it  separated 
North  and  South  America  into  two  islands,  and  I  did  not  know 
whether  or  not  we  were  hereafter  to  live  in  a  state  of  splendid 
isolation  or  in  a  state  of  comity,  interest,  and  commerce.  Indeed,  I 
was  very  much  like  that  Irishman  who  saw  a  building  going  up,  and 
as  he  looked  at  the  mortar  between  the  bricks  he  said,  in  his  own 
peculiar  philosophy:  "Will  it  keep  them  together  or  keep  them 
apart?"  [Laughter.] 

Gentlemen  of  this  Conference,  the  sessions  which  you  have  held 
this  week  are  a  tangible,  practical,  and  enduring  answer  to  the  prob- 
lem of  which  the  digging  of  the  canal  has  been  merely  the  physical 
expression;  namely,  the  bond  which  has  drawn  closer  and  closer 
into  friendship  and  commercial  intercourse  the  republics  of  the 
North  and  the  republics  of  the  South.  [Applause.] 

This  has  been  a  great  Conference  for  a  number  of  reasons.  This 
Conference  could  not  have  occurred  by  the  mere  wish  of  any  one 
man.  It  is  the  fruition  of  a  fine  idea,  and  you  are  fortunate  to-night 
in  having  present  with  you  the  men  who  have  made  it  possible,  not 
only  to  have  this  building,  but  to  have  the  Conference  during  the 
past  week  in  this  building.  Not  the  least  among  the  men  who, 


BANQUET.  489 

through  seasons  of  adversity  and  through  seasons  of  prosperity,  have 
with  tenacity,  philosophy,  and  American  courage  stood  by  the  Pan- 
American  idea  is  the  Director  of  this  Union,  the  Honorable  John 
Barrett. 

Gentlemen,  you  would  not  have  come  to  us  in  your  spirit  of  friend- 
ship, the  spirit  which  I  discovered  when  the  Secretary  of  the  Treas- 
ury did  me  the  honor  to  send  me  down  to  the  Narrows  and  set  me  on 
a  tug  in  order  that  you  might  be  the  only  ones  who  came  into  the 
port  of  New  York  without  paying  duty;  you  would  not  have  come 
in  such  a  friendly  spirit  had  you  not  been  given  the  opportunity  to 
know  what  the  heart  and  purpose  of  the  American  people  was  toward 
you,  your  peoples,  and  your  Republics.  And  this  idea  was  never 
more  eloquently  and  in  a  more  truly  and  patriotically  American 
fashion  asserted  than  by  the  gospel  which  has  been  preached  for  a 
decade  of  years  by  the  man  whom  America  is  proud  to  call  one  of 
the  greatest  Secretaries  of  State  we  have  ever  had,  Mr.  Bryan. 
[Applause.]  I  believe  there  could  be  no  better  motto  for  your  Con- 
ference, for  the  future  organization  consequent  upon  it  than  that 
which  he  set  in  such  pithy  form  to  a  distinguished  citizen  of  one  of 
your  Republics  when  he  said :  "  The  Lord  hath  made  us  neighbors ; 
let  justice  make  us  friends." 

It  is  not  enough  that  we  should  have  the  sentiment  of  friendship. 
It  must  be  solid;  it  must  be  supported  by  the  tangible  evidences  of 
friendship  in  legitimate,  honest  courses  of  trade  and  commerce. 
That  this  Conference  has  been  a  success  is  due  to  the  fact  that  if  Mr. 
McAdoo  never  did  anything  else  for  his  country  than  what  he  did 
when  he  conceived  and  put  into  operation  .the  purposes  of  this  meet- 
ing, he  brought  about  an  understanding  and  a  modus  vivendi  and 
a  method  of  operation  for  the  practical  expression  of  the  feelings 
of  our  people,  which  feeling  is  going  to  find  its  fruition  in  the 
increased  commerce  and  trade  of  the  entire  continent,  not  only  for 
the  preservation  of  the  products  of  America  but  for  the  protection 
of  the  hemisphere  against  the  opposition  of  the  world.  [Applause.] 

It  is  very  thoughtful  of  the  Secretary  to  have  called  on  me  at  this 
farewell  gathering  to  help  say  good-by  to  you,  because  I  first  met 
you  in  New  York,  and  I  am  compelled  to  say  that  you  look  the  worse 
for  wear  this  week.  Then  you  were  fatigued  from  entertainment, 
now  you  are  suffering  an  honest  fatigue  from  labor ;  so  you  have  the 
consolation  of  going  to  sleep  with  clear  consciences  this  week,  which 
I  hope,  but  I  am  not  sure,  you  had  last  week.  [Laughter.] 

However,  gentlemen,  it  has  been  a  pleasure  for  me  to  have  a  per- 
sonal identification  with  your  Conference,  even  remotely,  away  in 
New  York.  It  was  a  distinguished  honor  to  represent  the  Secretary 
of  the  Treasury,  and  it  will  be  a  long  while  before  I  shall  forget 


490  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

the  many  hospitable,  friendly,  and  genial  influences  with  which  I 
ca  me  into  contact  by  intercourse  with  all  of  your  delegates.  Nothing 
more  can  be  said  than  this,  that  the  United  States  of  America  should 
be  proud  of  the  efforts  which  she,  through  her  officers  of  the  govern- 
ment, has  exerted,  and  the  United  States  of  America  is  proud  of 
every  delegate  who  came  from  the  sister  Republics  to  attend  the 
Conference.  This  will  only  be  completely  successful  when  we  of  the 
United  States  send  to  the  countries  of  Central  and  South  America 
men  who  have  the  same  standing  here  as  you  have  at  home,  men  of 
the  same  caliber,  business  ability,  morals,  and  ideas  as  those  whom 
the  sister  Republics  have  sent  to  the  United  States.  [Prolonged 
applause.] 

Secretary  McAooo.  Gentlemen,  there  were  printed  for  distribution 
among  the  guests  of  the  evening  copies  of  the  Federal  Reserve  Act 
containing  Governor  Hamlin's  splendid  indexed  digest,  and  specially 
bound  with  the  name  of  each  delegate  stamped  thereon.  The  guests 
of  the  evening  have,  however,  changed  so  much  since  the  first  accept- 
ance that  we  have  not  books  for  each  member  here  to-night.  I  would 
suggest  that  those  who  have  not  received  copies  should  hand  their 
names  and  addresses  to  the  Secretary- General,  Dr.  Rowe,  who  will 
see  that  books  are  sent  to  them.  We  have  no  blank  copies,  and  so 
can  not  furnish  them  to-night. 

And  now,  gentlemen,  the  hour  has  come  for  us  to  part,  and  before 
we  do  I  should  like  to  make  grateful  acknowledgment  to  the  press 
of  this  country  for  the  splendid  and  sympathetic  treatment  it  has 
given  to  the  proceedings  of  this  Conference.  [Applause.]  We 
are  deeply  grateful  to  the  newspapers  of  America.  I  also  wish  to 
express  my  deepest  appreciation  and  thanks  for  the  use  of  this  beau- 
tiful building  for  the  proceedings  of  this  Conference,  and  to  Mr. 
John  Barrett  and  to  all  of  the  directors  of  the  Pan  American  Union 
for  their  kindness  and  courtesies. 

And  now,  my  friends,  I  wish  to  dismiss  you  with  this  simple  bene- 
diction, that  while  you  in  Latin  America  speak  a  different  tongue 
from  that  which  we  use  in  North  America,  yet  let  us  hope  that  we 
shall  always  speak  the  common  language  of  friendship  and  mutual 
admiration.  [Prolonged  applause.] 


NOTES  ON  THE  TRIP  OF  THE 
DELEGATES,  AT  THE  CONCLU- 
SION OF  THE  CONFERENCE 


491 


TRIP  MADE  BY  THE  DELEGATES.1 


As  guests  of  the  United  States  Government,  a  number  of  the  dele- 
gates of  the  Pan  American  Financial  Conference  availed  themselves 
of  an  invitation  extended  by  the  Secretary  of  the  Treasury,  Mr. 
McAdoo,  to  secure  a  first-hand  view  of  the  industries  and  activities 
of  at  least  nine  large  cities  of  the  country.  Notwithstanding  the  fact 
that  they  were  traveling  almost  constantly  for  two  weeks  it  was 
interesting  to  the  delegates  that  they  were  able  to  traverse  less  than 
a  quarter  of  the  great  United  States.  A  notable  feature  of  the  trip 
was  the  cordial  reception  accorded  everywhere.  The  party  traveled 
through  nearly  3,000  miles  of  country;  it  visited  ten  States,  and  was 
entertained  and  banqueted  by  twelve  leading  American  cities.  There 
was  unfailing  hospitality;  Nation,  State,  and  city  united  to  make  the 
journey  memorable. 

In  spite  of  the  fact  that  he  had  barely  recovered  from  a  serious 
illness,  it  was  the  earnest  intention  of  Secretary  McAdoo  to  accom- 
pany the  party.  It  was  therefore  with  the  greatest  reluctance,  and 
only  because  important  matters  of  State  arising  from  the  world  crisis 
required  the  members  of  the  President's  Cabinet  to  be  in  Washington, 
that  Mr.  McAdoo  was  finally  obliged  to  forego  the  pleasure  of  person- 
ally conducting  the  delegates  en  route.  In  his  stead  he  therefore 
selected  Hon.  Andrew  J.  Peters,  Assistant  Secretary  of  the  Treasury, 
to  head  the  party.  Mr.  Peters,  a  former  member  of  Congress  from 
Boston,  was  in  personal  charge  throughout  the  entire  trip. 

At  the  disposal  of  the  guests  was  a  seven-car  vestibuled  special 
train.  The  equipment  was  new  throughout.  In  addition  to  each 
member  of  the  party  having  a  separate  compartment,  there  were 
library,  club,  and  observation  cars  for  his  comfort.  It  was  arranged, 
however,  that  of  the  fourteen  days  en  route  ODly  five  nights  were 
spent  on  the  train  and  the  remainder  in  hotels. 

One  notable  feature  of  excellent  service  was  the  transfer  of  more 
than  one  hundred  pieces  of  baggage  from  train  to  hotel  and  vice 
versa  at  each  city  visited.  The  delegate  left  the  train  with  no 
thought  of  his  belongings,  and  in  most  cases  upon  arrival  at  his  hotel 
found  his  baggage  had  preceded  him,  a  convenience  which  was  highly 
appreciated  by  the  travelers. 

ANNAPOLIS. 

The  travelers  left  Washington  for  Annapolis,  the  historic  capital 
of  Maryland,  an  hour  by  trolley,  to  inspect  the  United  States  Naval 

1  A  complete  itinerary  and  map  of  territory  traversed  will  be  found  on  page  81. 

493 


494  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

Academy.  There  they  were  greeted  by  Commander  Guy  H.  Bur- 
rage  and  a  special  detachment  of  cadets,  who  acted  as  an  escort  about 
the  beautiful  grounds.  In  the  Severn  River  near  by  there  was  a  fleet 
of  battleships.  Of  particular  interest  to  the  visitors  was  the  tomb 
of  John  Paul  Jones,  the  father  of  the  American  Navy. 

It  was  recalled  to  them  that  on  December  23,  1783,  General 
Washington  surrendered  his  commission  as  Commander  in  Chief  of  the 
Continental  Army  to  Congress,  then  sitting  at  Annapolis.  In  1608, 
Capt.  John  Smith  visited  this  site,  but  no  settlement  was  made  until 
1649,  when  a  company  of  Puritans  from  Virginia  established  here  a 
town  which  afterwards  came  to  be  named  Annapolis,  in  honor  of 
Queen  Anne. 

BALTIMORE. 

The  party  arrived  at  Baltimore  in  time  for  luncheon.  After  a 
sail  around  the  historic  harbor,  passing  the  spot  where  the  Star 
Spangled  Banner,  the  national  anthem,  was  written,  there  was  an 
automobile  trip  about  the  city,  which  included  a  short  stop  at  the 
Baltimore  Country  Club.  So  wonderfully  had  the  city  built  up  and 
progressed  that  it  was  utterly  impossible  to  tell  which  part  of  it  had 
been  devastated  by  the  great  fire. 

The  manufacturing  enterprises  of  Baltimore  are  most  varied, 
scarcely  a  single  important  industry  being  unrepresented.  It  is  said 
to  be  the  largest  manufacturing  center  in  the  United  States  for  fer- 
tilizers, straw  goods,  cotton  duck,  fruit  canning,  and  oyster  packing. 
In  the  total  value  of  its  manufactured  products  Baltimore  stood,  in 
1909,  thirteenth  among  the  cities  of  the  United  States.  The  ship- 
building industry  there  has  recently  undergone  marked  development. 

Mayor  Preston,  host  at  dinner,  made  his  welcoming  speech  in 
Spanish.  Dr.  Perez  Triana,  former  Minister  from  Colombia  to  Great 
Britain,  and  Dr.  Alfonso  Quinonez,  Vice  President  and  former  Presi- 
dent of  Salvador,  were  among  those  to  respond.  It  was  really  only 
a  beginning  for  Dr.  Perez  Triana,  whose  fame  as  an  orator  went  ahead 
of  him,  for  he  was  obliged  to  speak  in  almost  every  city.  United 
States  Senator  Blair  Lee,  of  Maryland,  also  spoke.  Striking  was  the 
table  arrangement — a  hollow  oblong — practically  inclosing  the  huge 
ballroom.  In  the  center  were  the  flags  of  the  Americas  and  ingenious 
miniature  fountains,  ponds,  brooks,  and  landscape  effects. 

PHILADELPHIA. 

With  bands  playing,  flags  of  the  various  countries  flying,  and 
the  broad  streets  lined  with  enthusiastic  spectators,  the  delegates 
were  taken  to  Independence  Hall  in  Philadelphia.  On  the  spot 
where  the  delegates  of  the  13  English  colonies — which  were  so  soon 
to  become  the  United  States — had  met  139  years  ago  to  declare 


TRIP   MADE   BY   THE   DELEGATES.  495 

their  independence,  the  representatives  of  the  13  American  Republics 
heard  Mayor  Blankenberg  advocate  a  closer  union  of  the  Americas. 
He  proposed  a  declaration  of  "  biter  dependence"  for  the  Americas 
and  the  United  States.  The  venerable  Dr.  Pablo  Desvernine  y 
Galdos,  Secretary  of  State  for  Cuba,  acting  as  honorary  chairman  of 
the  meeting,  was  greeted  by  continued  applause.  Roger  W.  Babson, 
of  Boston,  was  appointed  temporary  secretary.  Dr.  Gonzalo  Vergara 
Bulnes,  a  prominent  lawyer  of  Chile,  who  responded  to  the  mayor's 
salutation,  was  also  warmly  greeted.  Just  before  the  meeting  there 
was  an  inspection  of  the  Liberty  Bell. 

A  proposed  international  trade  flag  was  presented  to  Mr.  Peters — 
to  be  forwarded  to  Secretary  McAdoo — by  Miss  Sarah  Wilson,  grand- 
daughter of  Betsy  Ross,  who  made  the  first  American  flag.  The 
presentation  took  place  in  the  Betsy  Ross  House,  where  the  Stars 
and  Stripes  first  saw  daylight.  The  new  flag  was  designed  by  the 
Philadelphia  Chamber  of  Commerce  and  made  by  Miss  Wilson.  It 
was  of  pure  white,  bearing  in  the  center  a  single  star  of  the  same  blue 
which  marks  the  field  on  which  the  white  stars  of  the  flag  of  the  United 
States  are  emblazoned.  Miss  Wilson  suggested  the  flag  might  be  used 
on  ships  plying  between  the  Americas. 

"I  venture  to  pray,"  she  went  on, ' '  that  under  the  wise  guidance  of 
the  Almighty  God  the  day  may  sometime  come  when  all  ships 
engaged  in  trade  between  the  Americas  may  fly  this  flag,  as  it  stands 
for  equality  of  opportunity  and  security  for  the  peoples  of  all  nations." 

There  was  a  visit  to  League  Island  Navy  Yard,  where  a  boat  was 
taken  for  a  trip  on  the  Delaware  River  along  the  city  front  to  the 
famous  plant  of  the  William  Cramp  &  Sons  Ship  &  Engine  Building 
Co.  A  hat  factory — that  of  John  B.  Stetson — covering  6  acres  of 
ground,  and  where  three  and  a  half  million  hats  are  made  every  year, 
interested  the  visitors. 

"If  there  were  not  a  factory  of  any  kind  in  the  Latin- American 
countries,"  said  Alba  B.  Johnson,  president  of  the  Baldwin  Loco- 
motive Works,  at  the  formal  dinner,  "Philadelphia  could  supply  to 
the  inhabitants  every  necessity  and  most  of  the  luxuries  of  life." 

Mayor  Blankenberg  spoke.  Secretary  Peters  and  Dr.  Perez  Triana 
responded  for  the  visiting  party.  The  next  morning  there  was  a  visit 
to  the  Baldwin  Locomotive  Works.  At  the  United  States  Mint  it  so 
happened  that  a  quantity  of  Cuban  dollars  were  being  coined. 

PITTSBURGH. 

An  hour  before  the  train  reached  Pittsburgh  the  night  skies  began 
to  be  illuminated  by  the  reflection  of  hundreds  of  roaring  steel 
furnaces.  Bright  and  early  the  next  morning — and  not  discouraged 
by  a  steady  downpour  of  rain — a  special  train  was  boarded  for 


496  PAN   AMERICAN    FINANCIAL   CONFERENCE. 

McKeesport,  Pa.,  where  is  located  the  extensive  plant  of  the  National 
Tube  Works.  A  party  of  fifteen  young  girls  presented  each  of  the 
delegates  with  a  carnation  and  a  card  bearing  a  message  of  greeting. 
As  in  other  immense  plants,  but  here  particularly,  the  sightseers  were 
impressed  with  the  manner  in  which  the  " safety  first"  campaign' 
of  protecting  workmen  has  been  carried  forward.  There  was  pointed 
out  to  them  what  was  said  to  be  the  longest  manufacturing  building 
in  the  world.  They  saw  every  sort  of  steel  tubing  made. 

On  board  the  steamer  Sunshine,  where  luncheon  was  served,  a  trip 
of  several  hours  along  the  Monongahela  River  revealed  shores  lined 
for  twenty-five  miles  with  gigantic  steel  plants  and  blast  furnaces. 

Various  processes  of  steel  manufacture  were  explained  in  detail 
at  the  Homestead  works  of  the  Carnegie  Steel  Co.  It  is  one  of  36 
separate  plants  of  a  concern  which  has  40,000  employees. 

In  the  armor-plate  mill,  opened  only  on  very  special  occasions 
to  visitors,  there  were  seen  the  port  plates  for  the  Arizona,  the  new 
United  States  battleship  just  launched,  and  the  onlookers  were  told 
how  it  took  nine  months  to  make  one  plate.  They  were  shown  plates 
which  will  be  riveted  to  the  battleship  California,  also  building — 
great  curved  pieces  of  steel  that  require  special  railroad  cars  to  carry 
them.  The  magnitude  of  the  operations  held  the  visitors  in  wonder. 
They  saw  steel  in  every  form,  from  the  red  ore  in  the  cars  and  the 
liquid  iron  of  the  blast  furnaces  as  it  ran  into  pigs,  into  the  great 
steel  ingot  that  would  crush  a  house  should  it  fall  upon  it,  to  the 
finished  strips  and  plates  into  which  the  ingot  was  mauled  and  jammed 
and  fashioned  in  less  time  than  a  cook  can  shape  a  lump  of  dough  into 
a  loaf.  And  it  is  so  much  of  a  physical  task  to  endeavor  to  walk 
about  one  of  these  great  plants  that  it  took  a  major  portion  of  a  day 
to  see  a  small  part  of  it. 

At  a  dinner  given  by  the  Chamber  of  Commerce  of  Pittsburgh,  its 
president,  David  P.  Black,  told  of  Pittsburgh's  interest  in  the  growth 
and  welfare  of  the  countries  to  the  south.  Mayor  Joseph  G.  Arm- 
strong spoke  along  the  same  line.  George  W.  Guthrie,  United  States 
ambassador  to  Japan,  said  it  was  absolutely  necessary  for  the  South 
American  nations  and  the  United  States  to  come  into  more  friendly 
contact  with  each  other.  Henry  P.  Bope,  president  of  the  Foreign 
Trade  Commission  of  Pittsburgh,  and  Samuel  Hardin  Church, 
president  of  the  Carnegie  Institute,  spoke.  Dr.  Vicente  Gonzales, 
of  Ecuador,  said  that  the  various  Governments  had  shown  their 
confidence  and  friendliness  by  accepting  Secretary  McAdoo's  invita- 
tion to  take  part  in  the  Pan  American  Financial  Conference. 

The  following  morning  until  train  time,  a  visit  to  the  glass  works 
of  Pittsburgh  and  automobile  rides  through  the  beautiful  parks  of  the 
city  occupied  the  time  of  the  delegates. 


TRIP   MADE   BY   THE   DELEGATES.  497 

ST.  LOUIS. 

Governor  Major,  of  Missouri,  a  battalion  of  the  National  Guard,  a 
squadron  of  police,  and  a  brass  band  met  the  train  in  St.  Louis. 
Finely  equipped  special  street  cars  carried  the  party  from  the  station 
while  people  in  shops  and  factories  applauded.  Different  features 
were  arranged  by  committees  of  the  St.  Louis  Business  Men's  League 
and  of  the  St.  Louis  Clearing  House  Association.  There  was  a  visit 
to  the  Missouri  Botanical  Garden,  which  was  laid  out  and  presented 
to  the  city  by  Henry  Shaw.  In  the  day's  program  was  an  automo- 
bile trip  over  the  city.  St.  Louis  is  noted  as  a  commercial  center. 
The  wholesale  trade  exceeds  in  value  $600,000,000  per  annum.  The 
city  also  commands  over  6,000  miles  of  direct  navigation  by  river, 
accessible  to  steamers  and  barges  during  a  large  part  of  the  year. 
There  are  upwards  of  twenty  lines  of  railway,  some  of  which  are  parts 
of  extensive  systems,  entering  the  city.  Transportation  by  rail  is 
facilitated  by  five  bridges  across  the  Mississippi  and  Missouri  Rivers. 

The  Latin-American  guests  were  taken  to  the  farm  once  owned  by 
General  U.  S.  Grant,  now  the  country  home  of  August  Busch.  Gen- 
eral Grant  was  born  in  Ohio,  but  he  married  Julia  F.  Dent,  of  St. 
Louis,  a  sister  of  one  of  his  classmates  at  West  Point,  and  the  Missouri 
city  afterwards  became  closely  associated  with  the  great  soldier  and 
president. 

A  banquet  was  spread  at  the  Sunset  Hill  Country  Club.  The  next 
day  there  was  more  sightseeing  and  a  luncheon  at  the  St.  Louis  Club. 

CHICAGO. 

To  the  flourishes  of  trumpets,  a  detachment  of  cavalry  forming  a 
guard  of  honor,  the  Pan  American  guests  were  escorted  from  the 
station  to  hotel,  along  Michigan  Avenue,  in  Chicago.  Early  the  next 
morning  there  was  a  special  welcome  to  the  second  largest  city  in  the 
United  States — for  Chicago  now  has  a  population  of  close  to  two 
million  and  a  half — by  Mayor  Thompson  in  the  many-storied  City 
Hall.  The  latter,  located  in  the  business  district,  gave  the  visitors 
more  the  impression  of  an  American  " skyscraper"  rather  than  a 
conventional  city  edifice.  However,  owing  to  a  law  restricting  the 
height  of  buildings,  New  York  has  taller  business  structures  than 
Chicago,  some  of  them  approximating  close  to  forty  stories.  The 
highest  in  Chicago  is  twenty-two  stories,  but  at  least  one  office  building 
spreads  over  so  much  ground  that  it  affords  a  capacity  for  6,000  tenants. 

Inasmuch  as  the  city  of  Chicago  possesses  one  of  the  most  beautiful 
park  and  boulevard  systems  in  the  world — and  incidentally  some 
4,000  miles  of  paved  streets — it  was  appropriate  that  a  great  auto- 
mobile sightseeing  trip  should  be  in  order.  The  route  taken  led 
north,  but  finally  completely  encircled  the  city,  coming  in  from  the 
98257°— 15 32 


498  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

south.  The  Chicago  River  and  its  branches  divide  the  city  into 
three  parts.  In  the  south  section  the  visitors  noticed  the  numerous 
movable  bridges,  some  fifty  of  them,  quite  a  few  of  which  folded  up  or 
raised  in  a  manner  novel  to  many  of  the  sightseers.  Chicago  extends 
along  Lake  Michigan  for  twenty  miles  and  the  automobile  trip  afforded 
an  unusual  opportunity  to  traverse  the  picturesque  lake  front.  More 
than  passing  attention  was  given  to  the  site  of  the  World's  Columbian 
Exposition,  several  buildings  of  which  are  still  standing. 

Bernard  Singer,  local  consul  from  Nicaragua,  presided  at  a  luncheon 
given  by  the  Pan  American  Consular  Association  of  Chicago.  The 
distinguished  visitors  met  financial  and  commercial  Chicago  at  a 
banquet  given  by  the  city,  the  Chicago  Association  of  Commerce, 
the  Chicago  Clearing  House  Association,  the  Illinois  Manufacturers7 
Association,  the  Illinois  Bankers'  Association,  and  the  Chicago 
Board  of  Trade.  The  speakers  on  this  important  occasion  were 
Hon.  Edward  F.  Dunne,  governor  of  Illinois,  Hon.  William  Hale 
Thompson,  mayor  of  Chicago,  George  M.  Reynolds,  president  of 
the  Continental  and  Commercial  National  Banks,  Dr.  Perez  Triana, 
and  Hon.  Andrew  J.  Peters,  the  Assistant  Secretary  of  the  Treasury. 
John  J.  Arnold,  vice  president  of  the  First  National  Bank  of  Chicago, 
was  the  toastmaster. 

A  tour  was  made  the  next  morning  of  the  Union  Stockyards,  where 
centers  the  live-stock  and  packing  industry,  which  covers  an  area  of 
nearly  500  acres.  Meat  packing  is  the  greatest  local  industry  and  is 
that  for  which  Chicago  is  best  known.  In  the  enormous  stockyards 
from  two-thirds  to  four-fifths  of  the  cattle  and  hogs  received  are 
killed,  and  sent  out  in  various  forms  of  prepared  meats  and  by- 
products, such  as  lard,  fertilizers,  glue,  soap,  candles,  and  so  on. 
The  introduction  of  the  refrigerator  railway  car  in  the  seventies, 
making  possible  the  distant  marketing  of  dressed  meats,  enormously 
increased  the  business. 

There  was  a  specially  conducted  trip  through  the  larger  packing 
houses  and  afterwards  the  visitors  were  guests  at  a  luncheon  at  the 
Saddle  and  Sirloin  Club  with  the  following  packing  concerns  as  hosts; 
Sulzberger  &  Sons,  Armour  &  Co.,  Morris  &  Co.,  Swift  &  Co.,  and 
Libby,  McNeil  &  Libby.  At  night  there  was  an  informal  dinner 
at  the  Chicago  Athletic  Association. 

DETROIT. 

Easily  most  spectacular  in  its  particular  way  was  the  visit  to  the 
Ford  automobile  factory.  Here  our  neighbors  to  the  south  became 
so  interested  at  the  rapidity  with  which  finished  automobiles  were 
turned  out  of  the  plant  that — with  watch  in  hand — they  saw  three  new 
machines  come  down  the  runway  each  minute — one  every  twenty  sec- 
onds. It  seemed  unbelievable  to  them  that  a  single  company  could 


TRIP   MADE   BY   THE   DELEGATES.  499 

turn  out  more  than  three  hundred  thousand  automobiles  in  the  short 
space  of  a  year.  Possibly  nowhere  does  the  visitor  have  a  greater 
opportunity  to  study  the  automobile  than  in  Detroit.  There  are 
thirty-four  automobile  manufacturing  concerns  in  this  city  alone,  and 
during  the  year  automobiles  of  the  market  value  of  $400,000,000 
will  be  manufactured  here. 

It  was  a  source  of  wonder  that  such  a  delicate  and  comparatively 
small  mechanical  device — an  almost  human  mechanism — the  Bur- 
roughs adding  machine,  should  be  housed  in  factory  buildings 
occupying  two  city  blocks,  with  a  floor  space  of  seven  ane  one-half 
acres.  One  of  these  intricate  little  machines  is  produced  every  five 
minutes.  Henry  Ford,  of  the  Ford  Automobile  Co.,  and  Joseph 
Boyer,  president  of  the  Burroughs  Adding  Machine  Co.,  were  hosts  at 
luncheon  at  the  Detroit  Athletic  Club.  Afterwards  some  of  the  party 
availed  themselves  of  an  invitation  to  visit  the  large  drug  plant  of 
Parke,  Davis  &  Co.,  where  the  visitors  manifested  great  interest  in 
the  machines  which  were  turning  out  millions  of  medicinal  pills  a 
day.  The  party  then  gathered  on  the  company's  lawn  and  while 
partaking  of  a  buffet  luncheon  prepared  for  them  by  this  firm,  wit- 
nessed a  fire  drill  by  the  Parke,  Davis  &  Co.'s  own  fire  company  and 
also  an  exhibition  fire  drill  by  the  fire  boats  on  the  river.  From  the 
lawn  the  party  had  a  splendid  view  of  the  Canadian  side  of  the  river 
and  the  automobile  manufacturing  plants  which  line  the  banks. 

Beneath  outstretched  wings  of  the  American  eagle,  and  with  the 
walls  and  tables  decorated  with  the  flags  of  the  Americas,  the  party 
was  banqueted  by  the  Detroit  Board  of  Commerce.  Hon.  Edwin 
Denby,  a  former  member  of  Congress,  introduced  Charles  B.  Warren, 
president  of  the  board  of  commerce,  who  acted  as  toastmaster. 
Dr.  Aristides  Arjona,  Secretary  of  Finance  and  Treasury,  of  Panama, 
and  Hon.  William  Alden  Smith,  senior  United  States  Senator  from 
Michigan,  were  among  the  speakers. 

NIAGARA  FALLS. 

En  route  from  Detroit  to  Niagara  Falls  it  was  necessary  to  pass 
through  a  portion  of  Canada.  When  the  visitors  awoke  in  the 
morning  they  saw  real  signs  of  war.  Canadian  troops  were  seen 
guarding  power  houses  and  bridges.  Every  precaution  was  being 
taken  against  an  enemy.  Once  arrived  at  Niagara  Falls,  those  who 
had  not  visited  there  before  were  eager  to  acquaint  themselves  with 
the  scene  of  the  historic  "A.  B.  C."  mediation  meetings. 

It  was  an  ideal  day,  from  an  atmospheric  standpoint,  and  few,  if 
any,  of  the  party  were  absent  when  the  special  trolley  cars  arrived 
for  a  closer  inspection  of  the  Falls  and  a  trip  over  the  Royal  Gorge 
route,  affording  a  superb  view  of  the  rapids  below  the  Falls  on  both 
the  American  and  Canadian  sides  of  Niagara  River. 


500  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

A  first-hand  view  of  the  harnessing  of  Niagara  Falls  was  presented 
when  the  party  left  the  cars  to  visit  a  portion  of  the  plant  of  the 
Niagara  Falls  Power  Co.  To-day,  twenty-five  years  after  the  breaking 
of  ground  for  the  first  tunnel  diverting  water  from  Niagara  River  above 
the  Falls,  the  aggregate  amount  of  power  developed  by  the  Niagara 
Falls  Power  Co.  and  its  allied  interest,  the  Canadian  Niagara  Power 
Co.,  is  about  175,000  horsepower,  with  additional  capacity  in  course 
of  construction  amounting  to  50,000  horsepower.  Less  than  seven  per 
cent  of  the  total  flow  of  water  over  Niagara  has  been  diverted  by 
these  companies,  they  claim,  and  the  beauty  and  grandeur  of  the 
Falls  are  unimpaired.  Most  of  the  electrical  power  generated  is 
consumed  in  the  vicinity  of  the  Falls  proper,  but  Buffalo,  twenty-two 
miles  away,  takes  it  for  city  railroad  and  other  power  purposes. 
Another  immense  plant  visited  was  that  of  the  Hydraulic  Power  Co. 
There  was  a  luncheon  given  by  the  Niagara  Falls  Chamber  of 
Commerce. 

BUFFALO 

As  guests  of  the  Buffalo  Clearing  House  Association,  the  party  was 
taken  by  automobile  from  Niagara  Falls  to  Buffalo.  Besides  varying 
the  railroad  travel,  a  splendid  opportunity  was  afforded  in  seeing  one 
of  the  most  important  commercial  ports  of  the  Great  Lakes,  a  city 
which  owes  its  prosperity  to  commerce.  Fifteen  steamship  lines 
make  Buffalo  their  terminus;  innumerable  independent  vessels  ply 
to  the  chief  ports  on  the  Great  Lakes.  With  a  season  of  only  about 
246  days  in  the  year,  Buffalo  ranks  with  large  American  and  Euro- 
pean ports  in  extent  of  traffic.  The  Buffalo  street  railways  were 
among  the  first  to  adopt  electric  traction  and  the  system  of  free 
transfers. 

The  automobiles  took  the  guests  directly  to  the  Buffalo  Country 
Club,  passing  through  the  mammoth  park  which  was  the  scene  of  the 
Pan  American  Exposition,  a  most  interesting  feature  of  the  ride  to 
our  Latin-American  guests.  At  the  country  club  the  party  partook 
of  a  generous  buffet  luncheon  and  were  afforded  an  opportunity  for 
an  hour's  rest  before  returning  to  the  city  through  the  beautiful  parks 
and  residential  sections  of  Buffalo. 

Leaders  in  finance  and  business  attended  the  formal  dinner  at  the 
Buffalo  Club.  Hon.  Herbert  P.  Bissell,  Justice  in  the  New  York 
Supreme  Court,  was  the  toastmaster.  Gen.  Leopoldo  Cordova, 
Minister  of  Finance  of  Honduras,  spoke  at  length.  His  remarks  were 
greeted  with  enthusiasm  by  the  diners. 

SCHENECTADY. 

When  the  travelers  awoke  in  the  morning  electric  locomotives  had 
replaced  those  of  steam,  and  their  tram,  was  finally  parked  in  the 


TRIP   MADE   BY   THE   DELEGATES.  501 

heart  of  the  General  Electric  Works,  said  to  be  the  largest  plant  of  its 
kind  in  the  world,  an  establishment  which  at  times  gives  employment 
to  as  many  as  20,000  employees.  The  gigantic  works  had  taken  on  a 
gala  air.  There  was  an  impromptu  reception  upon  arrival.  High 
officials  of  the  company  personally  guided  the  visitors  through  as  large 
a  portion  of  the  plant  as  the  limited  time  permitted.  What  a  physi- 
cal task  a  complete  tour  would  present  may  be  realized  when  it  is 
told  that  the  ground  area  is  something  upward  of  300  acres;  one  build- 
ing alone  has  a  total  floor  space  of  490,000  square  feet.  There  are 
other  plants  located  throughout  the  country.  The  company's  busi- 
ness for  a  recent  year,  it  is  said,  amounted  to  $112,000,000. 

Of  interest  to  the  foreign  visitors  was  the  first  large  Curtis  steam- 
turbine  generator.  It  had  a  capacity  of  5,000  kilowatts.  When 
installed  in  Chicago  twelve  years  ago  it  was  the  largest  steam  turbine 
in  existence.  However,  after  six  years'  service  it  was  replaced  by 
a  Curtis  steam-turbine  generator  of  larger  capacity.  Of  the  many 
products  of  the  company  which  the  visitors  saw  in  course  of  con- 
struction were  turbines,  generators,  motors  of  all  kinds,  arc  and 
incandescent  lamps,  and  electric  mining  and  railway  locomotives. 

There  was  a  warm  welcome  for  the  Pan  American  party.  The 
brass  band — composed  entirely  of  General  Electric  employees — had 
given  a  special  concert.  As  the  Pan  American  Special  slowly  pulled 
out  there  was  a  final  serenade,  and  thousands  of  workmen  joined  in 
waving  a  farewell. 

BOSTON. 

At  Boston  there  was  a  fitting  and  handsome  climax  to  the  trip. 
Everything  for  the  comfort  and  convenience  of  the  now  pretty 
well  tired-out  visitors  had  been  thought  out  most  carefully.  After 
giving  plenty  of  time  for  dinner — no  formal  function  having  been 
arranged,  so  that  the  travelers  might  have  a  good  rest  to  begin 
with — there  was  a  delightful  popular  music  ("Pop,"  it  is  known 
as  in  Boston)  concert  given  by  the  Boston  Opera  Company  Orches- 
tra. Here  the  Central  and  South  American  guests  were  joined  by 
another  distinguished  company  of  visitors,  the  Chinese  Merchants 
Commission,  which  also  happened  to  be  in  Washington  at  the  time 
of  the  Pan  American  Conference. 

Each  guest  had  been  asked  to  write  on  a  card  the  thing  in  Boston 
he  desired  to  see  most.  Accordingly,  the  next  morning  was  devoted 
to  personally  conducted  tours.  Many  visitors  availed  themselves  of 
an  opportunity  to  view  the  historic  city  of  Boston  from  the  tower  of 
the  new  customhouse.  The  city  has  an  ordinance  limiting  the 
height  of  buildings  to  125  feet,  so  consequently  is  not  as  abundantly 
supplied  with  skyscrapers  as  other  places.  However,  the  customs 
tower,  built  by  the  Government  and  exempt  from  local  ordinances, 


502  PAN  AMERICAN   FINANCIAL   CONFERENCE. 

rises  to  a  height  of  3.25  feet.  The  central  tower,  with  its  pyramidal 
top,  furnishes  not  only  a  notable  landmark  but  an  unusual  viewpoint. 

There  was  an  invigorating  automobile  drive  of  some  30  miles  along 
the  north  shore  of  the  ocean  to  North  Beverly,  where  Mrs.  John  C. 
Phillips  and  Mrs.  Andrew  J.  Peters  served  tea  to  the  party.  Pos- 
sibly nowhere  in  this  country  are  there  more  ideal  roads  for  motoring 
than  among  these  beautiful  country  estates.  Lynn,  with  its  great 
factories,  and  Salem  so  rich  in  history  and  still  showing  traces  of  a 
recent  conflagration,  were  passed  en  route.  Also  Beverly,  where 
during  the  administration  of  President  Taft  the  summer  capital  of 
the  United  States  was  located. 

Then  there  was  the  farewell  banquet.  Attended  by  the  junior 
Senator  of  the  United  States  from  Massachusetts,  Mr.  Weeks,  the 
governor,  Mr.  Walsh,  the  mayor,  Mr.  Curley,  and  the  president  of 
Harvard  University,  Dr.  Lowell,  it  was  a  notable  event.  Secretary 
Peters  said  good-by  to  the  visiting  guests.  Dr.  Perez  Triana,  of 
Colombia,  and  Mr.  Vergara  Bulnes,  of  Chile,  responded.  Mr.  Zayas, 
formerly  the  Cuban  consul  general  at  New  York,  in  the  name  of  the 
visitors,  presented  Mr.  Peters  with  a  gold  clock  on  which  was  engraved 
the  Spanish  word  for  " Remembrance"  as  a  token  of  parting  esteem. 
Admiral  Cordeira  da  Graca,  of  Brazil,  proposed  a  toast  to  the  health 
of  the  President  of  the  United  States. 

The  guests  were  the  next  (and  last)  day  of  the  trip  given  the  priv- 
ilege to  be  the  first  ones  to  inspect  the  handsome  new  library  at 
Harvard  University  erected  in  memory  of  Harry  Elkins  Widener,  who 
was  lost  on  the  Titanic.  Dr.  Lowell,  the  president  of  Harvard,  person- 
ally conducted  the  party  through  the  building.  There  followed  a 
reception  by  the  former  Ambassador  to  Japan  and  Mrs.  Larz  Andersen 
at  "Weld,"  in  Brookline,  one  of  the  finest  estates  in  that  section  of 
the  country.  Afterwards  a  luncheon  was  served  at  the  Country  Club. 
An  hour  later  the  guests  boarded  their  special  train  for  the  last  time. 
There  was  a  fast  run  to  New  York  City,  where  the  guests  arrived  at 
9  o'clock  Sunday  evening.  Farewells  were  said  en  route  and  the 
successful  trip  was  at  an  end. 

MEMBERS  OF  THE  OFFICIAL  PARTY. 

Hon.  Andrew  J.  Peters,  of  Washington,  D.  C.,  Assistant  Secretary  of 

the  Treasury. 
Hon.  William  F.  Sands,  of  Washington,  D.  C.,  formerly  United  States 

Minister  to  Guatemala,  Assistant  Secretary  General  of  the  Pan 

American  Financial  Conference. 

Mr.  Horace  M.  Gillman,  of  Washington,  D.  C.,  assistant  to  Mr.  Peters. 
Brazil: 

Admiral  Cordeira  da  Graca,  of  the  Brazilian  Navy. 


TRIP   MADE   BY   THE   DELEGATES.  503 

Chile: 

Seiior  Dr.  Luis  Izquierdo,  former  Minister  of  Foreign  Affairs. 

Senor  Dr.  Augusto  Villanueva,  director  general  of  the  Bank  of 
Chile. 

Senor  Dr.  Gonzalo  Vergara  Bulnes,   a  prominent  corporation 

lawyer. 
Guatemala: 

Senor  Dr.  Juan  S.  Lara,  a  banker. 

Senor  Dr.  Rafael  Aparicio,  a  prominent  coffee  planter. 
Colombia : 

Senor  Dr.  Santiago  Perez  Triana,  formerly  Minister  to  Great 
Britain. 

Senor  Dr.  Santiago  Perez  Triana,  jr. 

Senor  Dr.  Gabriel  Llopis;  secretary  to  Don  Santiago  Perez  Triana. 
Honduras : 

Senor  Dr.  Leopoldo  Cordova,  Minister  of  Finance. 

Senor  Dr.  Daniel  Fortin,  former  Minister  of  the  Hacienda  and 

Public  Credit. 
Nicaragua: 

Senor  Dr.  Pedro  Rafael  Cuadra,  former  Minister  of  Finance. 

Senor  don  Pedro  Joaquin  Cuadra. 
Panama : 

Senor  Dr.  Aris tides  Arjona,  sr.,  Secretary  of  Finance  and  Treasury. 

Senor  don  J.  E.  Arjona. 

Senor  don  Aristides  Arjona,  jr. 

Senor  Dr.  Ramon  Arias  Ferand,  director  of  the  Canal  Zone  Bank. 
Ecuador  : 

Senor  Dr.  Enrique  Gallardo,  consul  general  at  New  York. 

Seiior  Dr.  Vicente  Gonzales  B.,  a  prominent  business  man. 
Cuba: 

Senor  Dr.  Porfirio  Franca  Alvarez  de  la  Campa,  chief  director  of 
the  National  Bank  of  Cuba. 

Senor  Dr.  Octavio  Zayas  y  Adan,  prominent  banker  in  Cuba,  and 

formerly  consul  general  at  New  York. 
Dominican  Republic: 

Seiior  Dr.  Francisco  J.  Peynado,  former  Minister  at  Washington. 


504  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

PAN   AMERICAN   UNION. 

Mr.  William  A.  Reed,  representing  the  Pan  American  Union  of 
Washington,  D.  C. 

PRESS   ARRANGEMENTS. 

Mr.  Robert  D.  Heinl,  of  the  Chamber  of  Commerce  of  the  United 
States,  in  charge  of  press  arrangements  for  the  Secretary  of  the 
Treasury. 

Mr.  Earl  Godwin,  of  the  Washington  Star,  assistant  in  charge  of 
press  arrangements. 

WASHINGTON    CORRESPONDENTS    ACCOMPANYING   THE   PARTY. 

Associated  Press,  Robert  Dougan. 
International  News  Service,  Mr.  Kendrick  Scofield. 
New  York  World,  Mr.  Isaac  Gregg. 
Christian  Science  Monitor,  Mr.  Alfred  Pitman. 

OFFICIAL    STENOGRAPHER. 

Mr.  Joseph  L.  B.  Chisholm,  of  Cambridge,  Mass.,  detailed  from  the 
Treasury  Department. 

SECRETARY   INTERPRETERS. 

Senor  Salvador  Martinez  de  Alva. 
Senor  Luis  Rivera  Rosas. 

IN    CHARGE   OF   TRANSPORTATION. 

Mr.  Hugh  Hassen,  of  Philadelphia,  special  passenger  agent,  Pennsyl- 
vania Railroad. 
Mr.  J.  J.  Good,  of  Philadelphia,  special  baggage  agent. 


CABLEGRAM  SENT  BY  THE  PRESI- 
DENT OF  THE  UNITED  STATES  TO 
THE  PRESIDENTS  OF  THE  LATIN 
AMERICAN  COUNTRIES  REPRE- 
SENTED AT  THE  PAN  AMERICAN 
FINANCIAL  CONFERENCE  AND 
REPLIES  THERETO 


505 


• 


7  'f  A  A 


CABLEGRAM  SENT  BY  THE  PRESIDENT  OF  THE  UNITED 
STATES  TO  THE  PRESIDENTS  OF  THE  LATIN  AMERICAN 
COUNTRIES  AND  REPLIES  THERETO,  REPRESENTED  AT  THE 
PAN  AMERICAN  FINANCIAL  CONFERENCE. 


[THE  PRESIDENT'S  CABLEGRAM.] 

WASHINGTON,  D.  C.,  June  1^  1915. 

Impressed  with  the  outcome  of  the  Conference  of  American  Finan- 
ciers, it  is  especially  gratifying  to  me  to  express  to  Your  Excellency 
the  appreciation  of  this  Government,  and  my  own  thanks,  for  the 
material  aid  lent  to  the  success  of  the  Conference  by  the  distinguished 
gentlemen  it  was  your  pleasure  to  send  as  delegates  of  your  Govern- 
ment and  our  honor  to  receive  them  as  guests  of  this  Nation.  The 
patriotic  and  intelligent  labors  of  this  Conference  of  leading  men 
from  our  sister  Republics  of  Central  and  South  America  will,  I  feel 
assured,  bear  early  and  beneficial  fruits  and  lead  to  increased  mutual 

prosperity. 

WOODROW  WILSON. 

[REPLIES.] 
ARGENTINA. 

BUENOS  AIRES,  June  16,  1915. 
His  Excellency  WOODROW  WILSON, 

President  of  the  United  States,  Washington,  D.  C.: 
I  have  been  most  agreeably  impressed  by  the  dispatch  in  which 
Your  Excellency  expresses  to  me  your  favorable  opinion  regarding 
the  results  achieved  by  the  Pan  American  Financial  Congress.  I 
share  the  opinion  of  Your  Excellency  and  confidently  believe  that 
the  labors  of  the  assembly  will  prove  highly  beneficial  to  the  solidarity 
of  the  American  Republics,  stimulating  the  economic  bonds  necessary 
for  their  mutual  development.  It  is  a  source  of  special  satisfaction 
to  me  to  know  that  the  work  of  the  Argentine  delegates  has  merited 
the  kind  approval  of  Your  Excellency. 

V.  DE  LA  PLAZA. 
BOLIVIA. 

LA  PAZ,  BOLIVIA,  June  16,  1915 
His  Excellency  the  PRESIDENT  OF  THE  UNITED  STATES, 

Washington,  D.  C.: 

In  reply  to  the  cablegram  in  which  Your  Excellency  is  good  enough 
io  communicate  your  favorable  impressions  as  to  the  success  of  the 
Pan  American  Financial  Conference,  called  through  the  happy  initia- 
tive of  the  Government  over  which  Your  Excellency  so  worthily  pre- 
sides, I  have  the  honor  to  express  my  thanks  for  the  cordial  welcome 

507 


508  PAN  AMERICAN   FINANCIAL  CONFERENCE. 

extended  by  Your  Excellency  and  by  your  enlightened  Government 
to  the  delegation  of  Bolivia,  and  to  give  utterance  to  the  confident 
belief  I  entertain  as  to  the  wholesome  influence  which  the  labors  of 
the  Conference,  intelligently  carried  out,  will  have  on  the  relations 
and  common  prosperity  of  the  three  Americas. 

ISMAEL   MONTES. 

BRAZIL. 

Rio  DE  JANEIRO,  June  18,  1915. 
His  Excellency  the  PRESIDENT  OF  THE  UNITED  STATES, 

Washington,  D.  C.: 

I  received  with  very  real  pleasure  Your  Excellency's  telegram  on 
the  occasion  of  the  closing  of  the  Pan  American  Financial  Conference 
and  thank  Your  Excellency  for  the  hospitality  accorded  the  dele- 
gates of  Brazil.  I  congratulate  Your  Excellency  most  warmly  on 
the  success  of  the  labors  of  the  Conference,  which,  I  feel,  assured,  will 
produce  early  and  profitable  results  and  concur  toward  the  greater 
prosperity  of  all  the  American  Republics. 

WENCESLAO  BRAZ  P.  GOMES. 

CHILE. 

SANTIAGO,  CHILE,  June  2,  1915. 
His  Excellency  the  PRESIDENT  OF  THE  UNITED  STATES, 

Washington,  D.  C.: 

On  behalf  of  the  Government  of  Chile,  I  take  pleasure  in  offering 
your  excellency  my  most  sincere  congratulations  for  the  success  of  the 
Pan  American  Financial  Conference,  recently  held  in  Washington, 
and  at  which  resolutions  of  such  vast  moment  to  the  commercial  and 
economic  development  of  the  nations  of  America  were  adopted.  My 
Government  is  most  sensible  of  the  courtesies  extended  to  the  delegates 
of  Chile  to  this  Conference. 

RAMON  BARROS  Luco, 
President  of  the  Republic  of  (Ttiile. 

COLOMBIA. 

BOGOTA,  June  19,  1915. 
His  Excellency  the  PRESIDENT  OF  THE  UNITED  STATES, 

Washington,  D.  C.: 

I  am  much  gratified  to  learn  that  your  excellency  is  pleased  with 
the  success  of  the  Pan  American  Financial  Conference  of  Washington^ 
and  with  the  part  taken  therein  by  the  delegates  of  Colombia.  I 
tender  your  excellency  my  cordial  thanks  for  the  warm  welcome  given 
the  delegation  of  Colombia  and  for  the  generous  hospitality  it  received 


CABLE   CORRESPONDENCE.  509 

at  the  hands  of  your  excellency's  Government.  I  trust  that  the 
results  of  the  Conference  will  be  in  keeping  with  the  noble  wishes  of 
your  excellency  and  will  further  the  prosperity  of  all  the  nations  of  this 
continent. 

JOSE  VICENTE  CONCHA. 

COSTA  RICA. 

SAN  JOSE,  June  16,  1915. 
His  Excellency  the  PRESIDENT  OF  THE  UNITED  STATES, 

Washington,  D.  C.: 

Profoundly  grateful  for  the  kind  sentiments  which  Your  Excel- 
lency has  been  so  good  as  to  express  to  me  in  your  courteous  cable- 
gram of  to-day,  I  feel  highly  gratified  at  the  brilliant  success  of  the 
Conference  so  opportunely  initiated  by  Yo^ur  Excellency,  for  the 
purpose  of  bringing  about  in  a  practical  manner  the  development 
and  expansion  of  our  commercial  relations. 

ALFREDO  GONZALEZ. 
CUBA. 

HABANA,  June  15,  1915. 
His  Excellency  the  PRESIDENT  OF  THE  UNITED  STATES, 

Washington,  D.  C.: 

On  acknowledging  receipt  of  Your  Excellency's  cordial  and  cour- 
teous message  permit  me  to  thank  you  on  behalf  of  my  Government 
and  in  my  own  name  for  the  highly  appreciated  reception  given  to  the 
delegates  of  this  Government  to  the  Conference  of  American  Financiers. 
It  is  most  gratifying  to  me  to  know  that  our  delegates  lent  their  mate- 
rial aid  to  the  success  of  the  Conference,  and  I  trust  that  the  work 
rendered  by  the  distinguished  delegates  from  all  the  American  Repub- 
lics will  bring  about  a  closer  commercial  relation  and  an  era  of  greater 
prosperity  for  all  of  them. 

MARIO  G.  MENOCAL. 

SANTO  DOMINGO. 

SANTO  DOMINGO,  June  16,  1915. 
His  Excellency  WOODROW  WILSON, 

President  of  the  United  States,  Washington,  D.  C.: 
I  am  grateful  for  the  expressions  of  your  favorable  impressions 
regarding  the  aid  lent  by  our  delegates  to  the  Financial  Congress, 
and  I  entertain  the  hope  that  the  countries  lying  between  the  Behring 
and  Magellan  Straits  may  derive  great  advantages  from  it  and  thus 
increase  their  prosperity. 

J.  I.  JIMENEZ, 
President  of  the  Dominican  Republic. 


510  PAN  AMERICAN   FINANCIAL   CONFERENCE. 

ECUADOR. 

QUITO,  June  16,  1915. 
His  Excellency  WOODROW  WILSON, 

President  of  the  United  States,  Washington,  D.  C. : 
My  Government,  in  sending  its  delegates  to  the  Conference  of 
American  Financiers,  felt  certain  that  it  would  bear  great  fruit  in 
establishing  closer  commercial  relations  among  the  nations  of  our 
continent.  The  favorable  impressions  of  Your  Excellency  on  the 
results  attained  are  highly  gratifying  to  me,  and  it  is  a  very  great 
pleasure  to  offer  your  Nation  and  Your  Excellency's  Government 
the  gratitude  of  the  people  and  Government  of  Ecuador  for  the  gen- 
erous hospitality  shown  our  delegates. 

LEONIDAS  PLAZA. 

*      GUATEMALA. 

GUATEMALA,  June  17, 1915. 
His  Excellency  the  PRESIDENT  OF  THE  UNITED  STATES, 

Washington) D.  C.: 

Impressed  also  by  the  words  of  encouragement  contained  in  Your 
Excellency's  esteemed  cable  message  of  the  15th  instant,  I  take 
pleasure  in  expressing  to  you  my  sincere  acknowledgment  and 
gratitude  for  the  kind  and  generous  reception  which  the  Government 
of  that  great  and  prosperous  nation  saw  fit  to  accord  to  the  persons 
designated  by  Guatemala  to  attend  the  American  Financial  Conference 
recently  held  in  Washington.  I  likewise  take  special  pleasure  in 
expressing  my  sincere  congratulations  to  the  Government  and  people 
of  the  United  States  for  the  success  attained  by  the  Conference  and 
for  the  beneficial  results  which,  we  believe  will,  beyond  doubt,  soon 
flow  from  it  and  lead  to  increased  mutual  prosperity.  My  Govern- 
ment and  people  were  highly  honored  by  Your  Excellency's  kind 
invitation  to  Guatemala  to  take  part  in  the  Conference,  and  I  share 
Your  Excellency's  good  wishes  that  patriotic  and  intelligent  labor 
of  the  nature  referred  to  may  crown  its  work,  and  thus  bring  about 
an  extension  of  commerce  and  of  the  magnificent  relations  which, 
in  this  respect  unite  the  countries  of  North,  Central,  and  South 
America. 

With  feelings  of  high  regard,  I  am, 
Your  Excellency's  true  friend, 

MANUEL  ESTRADA  CABRERA. 


CABLE   CORRESPONDENCE.  511 

HONDURAS. 

TEGUCIGALPA,  HONDURAS,  June  16,  1915. 
His  Excellency  the  PRESIDENT  OF  THE  UNITED  STATES, 

Washington,  D.  O. : 

An  honor,  no  less  than  a  pleasure,  was  it  to  receive  the  courteous 
cablegram  in  which  Your  Excellency  so  kindly  expressed  fitting 
and  noble  thoughts  on  the  Pan  American  Financial  Conference, 
recently  held  in  that  Capital.  The  Government  of  Honduras  views 
with  great  pleasure  the  brilliant  success  which  has  attended  the 
praiseworthy  initiative  of  Your  Excellency  in  calling  the  American 
Republics  together  in  a  meeting  from  which  we  confidently  expect 
the  most  fruitful  results.  For  these  reasons  I  pray  Your  Excellency 
to  accept  my  very  warm  felicitations  and  most  cordial  wishes  for 
the  closer  relationship  and  prosperity  of  all  the  nations  of  the 
continent. 

F.  BERTRAND. 
NICARAGUA. 

MANAGUA,  NICARAGUA,  June  16,  1915. 
His  Excellency  the  PRESIDENT  OF  THE  UNITED  STATES, 

Washington,  D.  C.: 

I  have  the  honor  to  acknowledge  Your  Excellency's  cordial  and 
expressive  telegram  of  yesterday  on  the  outcome  of  the  Conference 
of  American  Financiers.  We  have  looked  upon  the  Conference  as  a 
promise  of  the  most  gratifying  consequence  for  the  prosperity  and 
closer  friendship  of  all  the  nations  of  America.  I  deem  it  a  pleasure 
as  well  as  a  duty  to  convey  to  that  nation  and  to  Your  Excellency 
the  warm  appreciation  and  thanks  of  this  Government,  to  which  I 
gladly  join  my  own,  for  the  generous  hospitality  extended  to  our 
delegates  and  for  the  interest  shown  in  the  Conference  which,  as 
Your  Excellency  so  fittingly  expresses,  will  yield  early  and  beneficial 
fruits  to  our  mutual  prosperity. 

ADOLFO  DIAZ. 
PANAMA. 

PANAMA,  June  15,  1915. 
His  Excellency  the  PRESIDENT  OF  THE  UNITED  STATES, 

Washington. 

I  cordially  appreciate  the  cablegram  of  Your  Excellency,  and  am 
most  happy  to  know  that  Your  Excellency  considers  that  the  dele- 
gates of  Panama  to  the  Financial  Congress  rendered  valuable  assist- 
ance in  the  great  work  conceived  by  the  illustrious  and  just  Govern- 
ment of  Your  Excellency  for  the  establishment  of  closer  relations 
between  the  great  American  Republic  and  her  sisters  of  the  same 
continent.  Permit  me  to  express  to  you  my  deep  gratitude  for  the 


512  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

exquisite  hospitality  extended  on  this  occasion  by  the  Government 
of  Your  Excellency  to  the  delegates  of  Panama  and  of  the  sister 
Republics  who  had  the  honor  to  take  part  in  the  Conference. 

BELISARIG  PORRAS. 
PARAGUAY. 

ASUNCION,  PARAGUAY,  June  25,  1915. 
His  Excellency  the  PRESIDENT  OF  THE  UNITED  STATES, 

Washington,  D.  C.: 

On  my  return  from  a  trip  across  my  country,  I  had  the  pleasure 
to  read  the  telegram  in  which  Your  Excellency  expresses  gratification 
for  the  success  of  the  recent  Pan  American  Financial  Conference,  and 
manifests  appreciation  of  the  aid  lent  by  the  delegates  of  Paraguay. 
In  thanking  Your  Excellency  for  these  courteous  expressions,  I  avail 
myself  of  the  opportunity  to  utter  the  very  sincere  wish  that  the 
results  of  the  Conference  will  be  fruitful  in  the  establishment  of  closer 
friendly  relations  and  in  the  creation  of  economic  and  financial  ties 
among  our  sister  nations. 

EDUARDO  SCHAERER, 

President  of  the  Republic. 
PERU. 

LIMA,  PERU,  June  16,  1915. 
His  Excellency  the  PRESIDENT  OF  THE  UNITED  STATES, 

Washington,  D,  C.: 

Having  read  the  attentive  telegram  with  which  Your  Excellency 
has  honored  me  to-day,  I  feel  the  most  complete  satisfaction  in  know- 
ing that  the  delegates  from  Peru  to  the  Pan  American  Financial  Con- 
gress have  worthily  fulfilled  the  instructions  and  intentions  of  my 
Government.  For  my  part  I  am  very  grateful  for  the  splendid  recep- 
tion which  Your  Excellency  and  your  Government  have  been  so  good 
as  to  extend  to  the  delegates,  and  I  am  certain  that  results  beneficial 
to  all  the  countries  of  America  will  be  derived  from  the  happy  initia- 
tive of  Your  Excellency  in  calling  a  conference  which  in  cementing 
the  spirit  of  Pan  American  solidarity  marks  a  new  era  in  the  eco- 
nomic development  and  prosperity  of  the  continent. 

GENERAL  BENAVIDES, 

President  of  Peru. 
SALVADOR. 

SAN  SALVADOR,  June  16, 1915. 
His  Excellency  the  PRESIDENT  OF  THE  UNITED  STATES, 

Washington,  D.  C.: 

I  have  the  honor,  in  reply  to  the  kind  cablegraphic  dispatch  of 
Your  Excellency,  dated  yesterday,  to  convey  to  Your  Excellency  the 
thanks  of  the  Government  of  Salvador  and  my  own  for  your  kind 


CABLE  CORRESPONDENCE.  513 

appreciations,  as  well  as  for  the  courtesies  dispensed  by  Your  Excel- 
lency's illustrious  Government  to  the  delegates  of  this  Republic  to 
the  Financial  Congress  while  guests  of  your  cultured  nation. 

In  voicing  the  sincere  hope  that  the  success  of  the  Conference, 
held  under  the  auspices  of  Your  Excellency's  Government,  may  cor- 
respond to  the  lofty  motives  which  inspired  its  inception,  I  avail 
myself  of  this  exceptional  opportunity  to  renew  to  Your  Excellency 
the  assurances  of  my  high  and  distinguished  consideration. 

CARLOS  MELENDEZ. 
URUGUAY. 

MONTEVIDEO,  June  15,  1915. 
His  Excellency  the  PRESIDENT  OF  THE  UNITED  STATES, 

Washington: 

It  is  with  true  pleasure  that  I  acknowledge  the  receipt  of  the 
telegram  of  Your  Excellency  relating  to  the  American  Financial  Con- 
gress which  has  just  closed  with  such  brilliant  success.  The  coopera- 
tion furnished  by  the  Uruguayan  Government  has  been  an  affirmation 
of  the  solidarity  of  interests  and  objects  which  exists  among  the 
American  countries  and  a  recognition  of  the  prestige  and  spirit  of 
initiative  of  the  Government  of  the  Union.  I  am  glad  to  share  the 
opinion  of  Your  Excellency  that  the  work  of  the  Conference  must 
bear  beneficial  fruits  for  the  American  countries.  Permit  me  to  add 
to  these  sentiments  my  wishes  for  the  prosperity  of  the  United  States 
and  for  the  happiness  of  Your  Excellency. 

FELICIANO  VIERA, 
President  of  the  Republic. 

VENEZUELA. 

CARACAS,  June  27, 1915. 
His  Excellency  the  PRESIDENT  OF  THE  UNITED  STATES, 

Washington,  D.  C: 

With  pleasure  do  I  respond  to  the  cordial  message  which  Your 
Excellency  addressed  to  me  in  connection  with  the  Conference  of 
American  Financiers  held  at  Washington.  I  trust  that  the  final 
results  of  this  Conference,  which  was  promoted  and  patronized  by 
Your  Excellency's  noble  Government,  will  be  worthy  fruits  of  the 
high  practical  talent  characteristic  of  the  great  descendants  of  Wash- 
ington, and  I  am  sure  that  these  mutual  benefits,  while  being  factors 
of  prosperity,  will  also  constitute  a  new  and  strong  bond  of  solidarity 
between  the  sister  Republics  of  this  continent.  In  the  name  of 
President-elect  General  J.  V.  Gomez,  of  the  Venezuelan  Government, 
and  in  my  own,  I  thank  you  for  the  splendid  hospitality  which  Your 
Excellency  extended  to  the  representatives  of  Venezuela. 

V.  MARQUEZ  BUSTILLOS. 

98257°— 15 33 


LETTER  FROM  THE  SECRETARY 
OF  THE  TREASURY  TO  THE 
DELEGATES  REGARDING  THE  FU- 
TURE OF  THE  WORK  INITIATED 
BY  THE  CONFERENCE 


515 


LETTER  FROM  THE  SECRETARY  OF  THE  TREASURY  TO 
EACH  DELEGATE  REGARDING  THE  FUTURE  WORK  OF 
THE  CONFERENCE. 


WASHINGTON,  D.  C.,  July  19, 1915. 

GENTLEMEN  :  As  you  are  about  to  leave  for  your  homes,  permit  me 
to  take  this  opportunity  of  saying  au  revoir  and  wishing  you  a.  safe 
and  pleasant  journey.  I  hope  that  you  take  with  you  happy  recol- 
lections of  your  visit  to  the  United  States.  I  also  hope  that  you  are 
convinced  that  the  work  of  the  first  Pan  American  Financial  Con- 
ference is  certain  to  produce  results  mutually  advantageous  to  our 
respective  countries. 

The  thorough  interchange  of  views  has  disclosed  many  obstacles 
now  existing  to  the  extension  of  trade  and  finance  among  all  the 
American  nations*  and  has  clearly  indicated  the  remedies  for  many 
of  these  difficulties.  I  feel  certain  that  you  are  determined  to  persist 
in  the  work  so  auspiciously  begun  by  the  Conference  until  the  largest 
measure  of  practical  results  has  been  obtained. 

In  order  that  there  may  be  no  cessation  in  the  work  we  have  un- 
dertaken, I  want  to  beg  of  you  to  submit  to  your  Government  the  fol- 
lowing suggestions: 

1.    ANNUAL  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

The  Conference  demonstrated  conclusively  to  my  mind  that  it 
will  be  of  immense  advantage  to  all  the  Eepublics  of  the  American 
Continent  to  hold  an  annual  Pan  American  Financial  Conference  in 
Washington.  I  am  going  to  ask  the  President  of  the  United  States 
to  strongly  recommend  this  to  the  next  session  of  the  United  States 
Congress  and  ask  for  a  sufficient  appropriation  to  carry  on  the  work. 
I  am  sure  that  the  Congress  of  the  United  States  will  act  favorably 
upon  this  suggestion.  I  respectfully  request  that  you  make  a  similar 
recommendation  to  your  Government.  I  have  suggested  that  the 
city  of  Washington  be  made  the  place  of  meeting  for  the  annual 
sessions  of  the  Pan  American  Financial  Conference  merely  because 
I  think  that  it  is,  on  the  whole,  the  most  convenient  place  therefor, 
and  that  it  is  possible  to  secure  a  larger  attendance  of  our  important 
financiers  and  business  men  in  Washington  than  elsewhere.  More- 
over,, the  Pan  American  Union  has  a  beautiful  building  in  Wash- 
ington, where  all  the  necessary  facilities  for  the  Conference  can  be 

517 


518  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

obtained.  It  is  also  important,  I  think,  to  have  the  Pan  American 
Financial  Conference  cooperate  with  the  Pan  American  Union.  I 
shall  be  glad,  however,  if  you  will  frankly  inform  me  whether  you 
think  it  would  be  better  to  hold  the  financial  conference  at  some 
other  place  than  Washington. 

2.    INTERNATIONAL  HIGH    COMMISSION   ON   UNIFORM  LEGISLATION. 

I  earnestly  recommend  that  the  minister  of  finance  of  your  country 
appoint  at  the  earliest  possible  moment  the  nine  members  of  the 
international  high  commission  proposed  in  the  report  of  the  com- 
mittee on  uniform  legislation.  I  inclose  several  copies  of  that 
report. 

In  order  that  this  high  commission  may  have  the  status  to  which 
its  importance  and  dignity  entitle  it,  I  think  that  the  minister  of 
finance  of  each  country  should  himself  accept  the  chairmanship  of 
the  commission  in  his  country.  This  suggestion  has  been  made  to 
me  from  many  quarters,  and  I  think  it  is  an  admirable  one.  The 
Secretary  of  the  Treasury  of  the  United  States  will  act  as  chairman 
of  the  commission  for  the  United  States.  If  the  ministers  of  finance 
of  the  several  countries  will  adopt  this  suggestion,  the  commission 
will  at  once  have  a  prestige  and  dignity  which  will  add  much  to  its 
effectiveness.  The  high  commission  of  each  country  should  promptly 
organize  and  appoint  a  secretary  general,  who  should  at  once  assume 
the  duties  of  his  office  and  get  into  communication  with  the  high 
commissions  appointed  by  the  several  countries. 

There  should  be  a  meeting  of  the  international  high  commission 
as  early  as  possible  at  some  suitable  place  in  Central  or  South  Amer- 
ica. I  would  suggest  the  city  of  Buenos  Aires  as  being  the  most 
convenient  point  for  this  purpose,  and  that  the  date  for  the  meeting 
be  the  1st  day  of  November,  1915.  This  date  would  be  very  appro- 
priate for  the  members  of  the  United  States  commission,  as  it  will 
be  about  one  month  before  the  next  session  of  the  United  States 
Congress,  which  convenes  on  the  6th  of  December,  1915.  Thus  an 
opportunity  would  be  given  to  submit  to  that  session  of  the  United 
States  Congress  the  conclusions  reached  by  the  international  high 
commission. 

It  is,  of  course,  essential  that  the  work  of  the  several  high  com- 
missions be  coordinated  and  have  general  direction  from  some 
common  point.  I  would  suggest  that  until  there  can  be  a  meeting  of 
the  international  high  commission  as  proposed,  the  secretary  general 
of  the  United  States  commission  act  temporarily  as  secretary  gen- 
eral for  the  international  high  commission,  and  I  shall  be  greatly 
obliged  if  the  minister  of  finance  of  each  country  will  cable  me  as 
soon  as  possible  if  this  suggestion  is  acceptable  to  his  country. 


SECRETARY   OF   THE   TREASURY  ON   WORK   OP   CONFERENCE.    519 

The  secretary  general  of  the  United  States  commission  will  have 
his  headquarters  in  the  United  States  Treasury  Department  at 
Washington,  and  will  be  immediately  under  the  direction  of  the 
Secretary  of  the  Treasury  of  the  United  States.  Every  effort  will 
be  made  to  keep  in  touch  with  the  general  situation  and  to  arrange 
for  the  meeting  of  the  international  high  commission  when  a  perma- 
nent organization  can  be  effected.  I  shall  greatly  appreciate  it  if 
the  minister  of  finance  of  each  country,  will  cable  me  at  the  Treasury 
Department  in  Washington  the  names  of  the  members  of  the  high 
commission  for  his  country  as  soon  as  they  are  appointed,  in  addi- 
tion to  the  name  of  the  secretary  general,  and  state  whether  the  city 
of  Buenos  Aires  is  agreeable  for  the  first  meeting  of  the  interna- 
tional high  commission,  and  if  November  1  is  acceptable  as  the  date 
for  said  meeting. 

Each  high  commission  should,  as  soon  as  appointed,  take  up  and 
consider  carefully  the  report  made  by  the  committee  on  uniform 
legislation  to  the  Pan  American  Financial  Conference,  dated  May 
29,  1915,  copies  of  which  are  inclosed,  and  should  send  to  the  secre- 
tary general,  Treasury  Department,  Washington,  D.  C.,  the  fullest 
possible  information  as  to  the  extent  to  which  the  recommendations 
of  the  committee  on  uniform  legislation  above  referred  to  are  re- 
garded favorably  by  their  Governments,  together  with  any  sugges- 
tions they  have  to  offer. 

I  would  also  respectfully  urge  upon  your  Government  the  im- 
portance of  making  such  provision  as  may  be  necessary  to  give  the 
high  commission  an  official  status  and  standing,  and  also  for  the 
making  of  a  reasonable  appropriation  to  enable  the  high  commis- 
sion of  each  country  to  carry  on  its  work.  I  shall  beg  the  President 
of  the  United  States  to  make  similar  recommendations  to  the  Con- 
gress of  the  United  States,  and  I  am  satisfied  that  there  will  be  no 
difficulty  in  securing  from  the  Congress  of  the  United  States  the 
necessary  appropriation  for  this  purpose.  The  creation  of  an  inter- 
national high  commission  is  certain  to  produce  advantageous  results 
in  all  the  countries  concerned.  I  respectfully  urge  upon  you  the 
importance  of  these  suggestions  and  beg  that  you  will  express  to 
your  Government  my  hope  that  it  will  take  early  and  favorable 
action  thereon. 

3.    PERMANENT   GROUP   COMMITTEES. 

Much  of  the  success  of  the  Conference  resulted  from  the  division 
of  the  representatives  of  the  United  States  into  18  group  committees, 
one  of  which  was  assigned  to  the  delegation  from  each  of  the  visiting 
countries,  thus  bringing  about  a  group  conference  between  the  dele- 


520  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

gates  of  each  country  and  a  committee  of  representative  financiers 
and  business  men  of  the  United  States,  with  a  resulting  interchange 
of  views  at  close  range  and  under  conditions  where  "the  problems  of 
each  country  were  intimately  discussed  and  the  difficulties  in  the 
way  of  more  extended  trade,  commerce,  and  intercourse  between 
them  were  developed  and  the  remedies  therefor  ascertained  and 
considered.  It  is  clear  that  it  will  be  to  the  interest  of  all  concerned 
if  these  group  committees  shall  be  continued.  It  is  my  purpose, 
therefore,  to  appoint  a  group  committee  in  this  country  to  which 
will  be  assigned  the  specific  duty  of  keeping  in  touch  with  the  dele- 
gates from  your  country,  and  of  acting  as  the  medium  in  the  United 
States ;  through  which  you  may  secure  reliable  information  or  submi  t 
matters  for  the  consideration  of  financiers,  merchants,  or  manufac- 
turers in  the  United  States.  This  committee,  will,  of  course,  have  no 
official  status  but  will  act  as  a  voluntary  organization  for  the  purpose 
of  fostering  closer  financial  and  commercial  relations  between  our  re- 
spective countries.  The  group  committees  now  appointed  will  serve 
until  the  convening  of  the  Pan  American  Financial  Conference  of 
1916,  unless  sooner  relieved  from  further  service  by  the  Secretary 
of  the  Treasury  of  the  United  States. 

I  would  suggest  that  the  delegates  from  your  country  continue  as 
a  group  committee  for  your  country,  so  that,  in  like  manner,  our  busi- 
ness men  and  financiers  may  be  able  to  apply  to  you  for  reliable  in- 
formation concerning  matters  affecting  business  or  finance  in  your 
country. 

4.  THE  IMPERATIVE  NECESSITY  FOR  THE  PROMPT  ESTABLISHMENT  OF 
INCREASED  AND  IMPROVED  STEAMSHIP  COMMUNICATION  BETWEEN 
THE  LEADING  PORTS  OF  LATIN  AMERICA  AND  THE  UNITED  STATES. 

It  was  the  unanimous  opinion  of  the  Conference  that  improved 
ocean  transportation  facilities  between  the  leading  ports  in  South 
and  Central  America  and  the  United  States  are  of  vital  importance. 
The  Conference  unanimously  adopted  the  following  resolution : 

Resolved,  That  it  is  the  sense  of  this  Conference  that  improved  ocean  trans- 
portation facilities  between  the  countries  composing  the  Pan  American  Union 
have  become  a  vital  and  imperative  necessity,  and  that  every  effort  should  be 
made  to  secure  at  the  earliest  possible  moment  such  improved  means  of  ocean 
transportation,  since  it  is  of  primary  importance  to  the  extension  of  trade  and 
commerce  and  improved  financial  relations  between  the  American  Republics. 

As  you  doubtless  know,  a  bill  was  introduced  in  the  last  Congress 
of  the  United  States,  and  almost  became  a  law,  authorizing  the  Gov- 
ernment of  the  United  States  under  certain  prescribed  conditions  to 
establish  steamship  lines  to  Latin  America.  A  copy  of  that  bill  is 


SECRETARY  OF  THE  TREASURY  ON  WORK  OF   CONFERENCE.    521 

inclosed.  Doubtless  the  Congress  at  its  forthcoming  session,  in  De- 
cember, 1915,  will  give  renewed  consideration  to  this  important 
matter.  It  would  be  very  helpful  if  you  would,  at  the  earliest  prac- 
ticable moment,  supply  me  with  the  following  information : 

(a)  Between  what  port  or  ports  in  your  country  and  what  port 
or  ports  in  the  United  States  do  you  consider  it  most  essential  to 
provide  additional  steamship  facilities? 

(b)  How  frequent  should  the  sailings  be? 

(c)  What  should  be  the  speed,  gross  tonnage,  and  general  char- 
acter of  the  ships  for  the  proposed  service  to  make  them  thoroughly 
competitive  with  the  ships  operated  between  European  countries  and 
the  leading  ports  in  your  country? 

(d)  What  are  the  passenger  rates  for  first  and  second  cabin  and 
for  steerage  between  your  principal  port  and  the  principal  port  of 
Great  Britain,  France,  Germany,  and  Italy? 

(e)  What,  in  your  judgment,  should  be  the  passenger  rates  for 
first  and  second  cabin  and  steerage  between  your  principal  port  and 
the  city  of  New  York,  between  your  principal  port  and  the  city  of 
New  Orleans,  between  your  principal  port  and  the  city  of  San  Fran- 
cisco?    What  are  the  present  rates  between  those  points? 

(/)  Give  the  cargo  rates  on  your  chief  articles  of  export  and 
import  between  your  principal  port  and  the  principal  port  of  Great 
Britain,  Germany,  France,  and  Italy  prior  to  the  outbreak  of  the 
European  war.  Please  give  the  same  information  as  to  cargo  rates 
between  the  same  ports  at  the  time  of  your  reply  to  this  inquiry. 

(g]  What  were  the  cargo  rates  on  your  chief  articles  of  export 
and  import  between  your  principal  port  and  the  ports  of  New  York 
and  New  Orleans  in  the  United  States  prior  to  the  outbreak  of  the 
European  war?  Please  give  the  same  information  as  to  cargo  rates 
between  the  same  ports  at  the  time  of  your  reply  to  this  inquiry. 

(h)  Give  the  approximate  amount  of  steam  tonnage  operating  be- 
tween your  principal  port  and  the  principal  port  of  Great  Britain, 
Germany,  France,  and  Italy  for  a  period  of  six  months  prior  to  the 
outbreak  of  the  European  war.  What  percentage  of  this  tonnage 
was  under  British  registry ;  what  percentage  under  German  registry ; 
what  percentage  under  French  registry;  what  percentage  under 
Italian  registry;  and  what  percentage  under  the  United  States  reg- 
istry? Give  the  same  information  for  the  six  months  prior  to  the 
date  of  your  reply  to  this  inquiry. 

(i)  Please  give  the  amount  of  steam  tonnage  between  your  leading 
port  and  the  cities  of  New  York,  New  Orleans,  and  San  Francisco 
for  six  months  prior  to  the  outbreak  of  the  European  war.  What 
percentage  of  this  tonnage  was  under  British  registry;  what  per- 


522  PAN   AMERICAN   FINANCIAL   CONFEEENCE. 

centage  under  German  registry ;  what  percentage  under  French  reg- 
istry; what  percentage  under  Italian  registry;  and  what  percentage 
under  the  United  States  registry?  Give  the  same  information  for 
the  six  months  prior  to  the  date  of  your  reply  to  this  inquiry. 

(j)  Please  state  whether  or  not  cargo  rates  between  your  leading 
port  and  the  ports  of  New  York,  New  Orleans,  and  San  Francisco 
in  the  United  States  are,  in  normal  times,  higher  than  to  competitive 
ports  in  Great  Britain,  Germany,  France,  and  Italy.  Please  give  a 
detailed  comparative  statement  of  such  rates. 

(k)  State  what  are  the  chief  disadvantages  under  which  commerce 
between  your  country  and  the  United  States  is  suffering  because  of 
these  higher  rates ;  to  what  extent  such  commerce  is  suffering  because 
of  inadequate  and  insufficient  steamship  service  between  your  country 
and  the  leading  ports  of  the  United  States.  Please  give  any  other 
information  bearing  upon  this  important  question  which  will  make 
the  problem  clearer,  and  give  me  your  suggestions  as  to  what  is 
necessary  in  the  way  of  specific  steamship  service  to  overcome  these 
disadvantages  and  to  promote  trade  and  commerce  between  your 
country  and  the  United  States. 

(I)  Please  state  what  undue  burdens  are  placed  upon  steamship 
companies  in  the  ports  of  your  country  in  the  way  of  port  charges, 
restrictive  or  burdensome  navigation  laws,  etc.,  and  whether  or  not 
these  burdens  can  be  removed. 

(m)  Please  state  what  favoring  laws  your  Government  is  willing 
to  enact  or  what  encouragement  your  Government  is  willing  to  give 
to  a  steamship  company  or  companies  which  will  establish  improved 
steamship  facilities  between  your  leading  port  and  the  leading  port 
or  ports  of  the  United  States. 

(n)  In  the  event  that  it  should  be  deemed  advisable  for  the  Gov- 
ernments concerned  to  furnish  the  capital  for  the  operation  of  steam- 
ship lines  between  your  country  and  the  United  States,  to  what  extent 
and  in  what  manner  would  your  Government  be  willing  to  assist  in 
establishing  and  operating  such  steamship  facilities? 

(o)  What  difficulties  exist  in  the  way  of  direct  cable  communica- 
tion between  your  country  and  the  United  States  ?  Give  comparison 
of  cable  rates  between  your  chief  city  and  New  York  City,  London, 
Berlin,  Paris,  and  Eome. 

(p)  Please  give  me  your  suggestions  as  to  how  the  need  of  suffi- 
cient cable  communications  between  your  country  and  the  United 
States  may  be  most  easily  remedied,  and  to  what  extent  and  in  what 
manner  your  Government  would  be  willing  to  join  with  the  United 
States  in  the  establishment  of  direct  cable  lines. 


SECRETARY  OF  THE  TREASURY  ON  WORK  OF  CONFERENCE.    523 

5.    IMPROVED  POSTAL  FACILITIES  BETWEEN  THE  UNITED  STATES  AND  LATIN- 
AMERICAN  COUNTRIES. 

The  Postmaster  General  of  the  United  States  has  asked  me  to 
request  you  to  submit  to  your  Government  the  following  information : 

The  Postmaster  General  of  the  United  States,  under  date  of  October  17,  1914, 
addressed  to  the  postal  authorities  of  each  of  the  countries  and  colonies  of  the 
Western  Hemisphere  to  which  our  domestic  letter  rate  did  not  then  apply  a 
proposal  on  the  part  of  this  Government  to  enter  into  conventions  establishing 
a  2-cent  letter  rate — the  domestic  rate — from  the  United  States  to  those  coun- 
tries, if  they  would  agree  that  letters  coming  from  their  countries  to  the  United 
States  should  bear  their  domestic  rate.  This  offer  upon  the  part  of  the  United 
States  postal  administration  still  stands  and  it  is  intended  in  the  near  future 
to  again  address  a  communication  to  each  country  renewing  the  offer. 

There  is  now  pending  an  offer  to  enter  into  a  convention  for  the  exchange  of 
money  orders  with  each  country  of  Central  and  South  America  with  which  we 
do  not  now  transact  such  business,  with  the  exception  of  two,  namely,  Guate- 
mala and  Venezuela,  which  at  this  time  have  no  domestic  money-order  system, 
and  consequently  could  not  exchange  remittances  in  that  form  with  the  United 
States.  It  is  the  purpose  of  the  Postmaster  General  to  renew  in  the  near  future 
the  invitation  which  he  has  extended  to  the  countries  referred  to  to  enter  into 
money-order  exchange  conventions  with  this  country  as  early  as  practicable. 

The  Postmaster  General  of  the  United  States  is  also  examining  the  terms  of 
the  parcel-post  conventions  in  force  between  the  United  States  and  the  several 
countries  of  Central  and  South  America,  with  a  view  to  removing  all  obstacles 
that  it  is  practicable  to  remove  in  the  way  of  restrictions  embodied  in  such 
conventions  which  interfere  with  the  freedom  of  transmission  of  parcels,  etc. 

The  things  above  indicated  are  those  which  the  Postmaster  General  of  the 
United  States  is  anxious  to  do  and  have  done  in  order  to  bring  about  better 
postal  relations  between  this  country  and  the  respective  countries  of  Latin 
America  with  a  view  to  increasing  the  trade  relations  between  the  countries  of 
the  Western  Hemisphere  for  their  mutual  advantage. 

I  hope  that  the  suggestions  of  the  Postmaster  General  will  receive 
due  consideration  on  the  part  of  your  Government.  Improved 
postal  facilities  between  our  respective  countries  is  one  of  the  essen- 
tials to  improved  financial  and  commercial  relations. 

I  shall  send  to  you,  as  soon  as  printed,  a  full  report  of  the  pro- 
ceedings of  the  First  Pan  American  Financial  Conference. 
Believe  me,  gentlemen,  with  warm  regards  and  best  wishes, 

Faithfully,  yours, 

W.  G.  McAooo. 


PERMANENT  COMMITTEE 
APPOINTMENTS  MADE  BY 
THE  SECRETARY  OF  THE 
TREASURY 


025 


PERMANENT  COMMITTEE  APPOINTMENTS. 


INTERNATIONAL  HIGH  COMMISSION. 


WILLIAM  GIBBS  McAooo,  Chair- 
man, 

Secretary  of  the  Treasury, 
Washington. 

JOHN  BASSETT  MOORE,  Vice  Chair- 
man, 

Columbian  University, 
New  York  City. 

JOHN  H.  FAHEY, 

President  Chamber  of  Com- 
merce of  the  United  States. 
Boston,  Mass. 

DUNCAN  U.  FLETCHER, 

President  Southern  Commer- 
cial Congress, 
Jacksonville,  Fla. 


DAVID  R.  FRANCIS, 

St.  Louis,  Mo. 

E.  H.  GARY, 

Chairman  of  Board,  United 
States   Steel   Corporation, 
New  York  City. 

A.  B.  HEPBURN, 

Chairman  Board  of  Directors 
Chase  National  Bank, 
New  York  City. 

GEORGE  M.  EEYNOLDS, 

President     Continental     and 
Commercial  National  Bank, 
Chicago,  111. 

SAMUEL  UNTERMYER, 
37  Wall  Street, 
New  York  City. 

LEO  S.  ROWE,  Secretary  General. 
J.  BROOKS  B.  PARKER,  Assistant  Secretary  General. 
CONSTANTINE  E.  McGuiRE,  Assistant  to  the  Secretary  General. 

SPECIAL  COMMITTEE  IN  CHARGE  OF  THE  VISIT  OF  AMERICAN 
FINANCIERS  AND  BUSINESS  MEN  TO  SOUTH  AND  CENTRAL 
AMERICA. 


JAMES  A.  FARKELL,  Chairman, 
President  United  States  Steel 
Corporation, 
New  York  City. 

JOHN  BARRETT, 

Director  General  Pan  Ameri- 
can Union, 

Washington. 

D.  P.  BLACK, 

President  Chamber  of  Com- 
merce, 

Pittsburgh,  Pa. 

JOHN  CLAUSEN, 

Crocker  National  Bank. 
San  Francisco,  Cal. 


D.  Y.  COOPER, 

Cotton  Manufacturer, 
Henderson,  N.  C. 

G.  A.  DAVIDSON, 

President  Panama-California 
Exposition, 

San  Diego,  Cal. 

DUNCAN  U.  FLETCHER, 

President  Southern  Commer- 
cial Congress, 
Jacksonville,  Fla. 

ELLIOT  H.  GOODWIN, 

Secretary  Chamber  of  Com- 
merce of  the  United  States, 
Washington. 

527 


528 


PAN   AMERICAN   FINANCIAL   CONFERENCE. 


S.  M.  HASTINGS, 

President  Illinois  Manufac- 
turers' Association, 

Chicago,  111. 
S.  T.  HENRY, 

Vice  President  McGraw  Pub- 
lishing Co., 

New  York  City. 
W.  S.  KIES, 

55  Wall  Street, 

New  York  City. 
DANIEL  KELLEHER, 

Seattle,  Wash. 
A.  L.  MILLS, 

President      First      National 
Bank, 

Portland,  Oreg. 
CHARLES  G.  MOORE, 

Panama  -  Pacific       Interna- 
tional Exposition, 
San  Francisco,  Cal. 


WALTER  PARKER, 

General  Manager  New   Or- 
leans   Chamber    of    Com- 
merce, 
New  Orleans,  La. 

ROBERT  H.  PATCHIN, 

Secretary     Foreign     Trade 
Council, 
New  York  City. 

JAMES  J.  SHIRLEY, 

Of  F.  A.  Gillespie  Co., 
New  York  City. 

WILLARD  STRAIGHT, 
23,  Wall  Street, 

New  York  City. 

EDWIN  WARFIELD, 

President  Fidelity  Trust  Co., 
Baltimore,  Md. 


PERMANENT  GROUP  COMMITTEES. 


ARGENTINA. 


WILLARD  STRAIGHT,  Chairman, 
23  Wall  Street, 

New  York  City. 
JAMES  A.  FARRELL, 

President  United  States  Steel 
Corporation, 
New  York  City. 


HENRY  FORD, 

President  Ford  Motor  Co., 

Detroit,  Mich. 
CYRUS  McCoRMiCK, 

International  Harvester  Co., 
Chicago,  111. 


FRANK  A.  VANDERLIP, 

President  National  City  Bank, 

New  York  City. 


BOLIVIA. 


JOSEPH  P.  GRACE,  Chairman, 
Of  W.  R.  Grace  &  Co., 

New  York  City. 
W.  F.  BIPPUS, 

Treasurer      National      Cash 
Register  Co., 
Dayton,  Ohio. 


J.  F.  O'NEiL, 

President  Fulton  Iron  Works, 

St.  Louis,  Mo. 
CHARLES  M.  PEPPER, 

Washington,  D.  C. 


GEORGE  H.  RICHARDS, 

Foreign  Department,  Remington  Typewriter  Co., 
New  York  City. 


PERMANENT   COMMITTEE  APPOINTMENTS. 
BRAZIL. 


529 


JOHN  HAYS  HAMMOND,  Chairman, 
71  Broadway, 

New  York  City. 

J.  B.  FORGAN, 

President      First      National 
Bank, 

Chicago,  111. 


FREDERICO  LAGE, 

Mechanics  &  Metals  National 
Bank, 

New  York  City. 
E.  W.  RICE, 

President    General    Electric 
Co., 
New  York  City. 


MORTIMER  L.  SCHIFF, 

Of  Kuhn,  Loeb  &  Co., 

New  York  City. 


CHILE. 


CHARLES  H.  SABIN,  Chairman, 
President     Guaranty    Trust 
Co., 
New  York  City. 

ROBERT  BACON, 

1  Park  Avenue, 

New  York  City. 

JOHN  J.  RASKOB, 

Treasurer  E.  I.  Du  Pont  de  Nemours  Powder  Co., 
Wilmington,  Del. 

COLOMBIA. 


G.  L.  DuVAL, 

Of  Wessel,  Duval  Co., 
New  York  City. 

DAVID  KINLEY, 

University  of  Illinois, 
Urbana  111. 


GEORGE  W.  NORRIS,  Chairman, 
Philadelphia,  Pa. 

MORRIS  COSTER, 

Foreign  sales  manager  West- 


W.  R.  SHEPHERD, 

Columbia  University, 
New  York  City. 

WALLACE  D.  SIMMONS, 


inghouse  Co.,  St.  Louis,  Mo. 

few  York  City. 

R.  LANCASTER  WILLIAMS, 
Baltimore,  Md. 


COSTA  RICA. 


J.  W.  EARLE,  Chairman, 


President  Remington  Type- 
writer Co., 


JOHN  CROSBY, 

Washburn- Crosby  Co., 
Minneapolis,  Minn. 


MINOR  C.  KEITH, 

President  United  Fruit  Co., 
New  York  City. 


New  York  City. 

G.  A.  AERTS, 

Rudolph  Wurlitzer  Co., 
Cincinnati,  Ohio. 

WALTER  PARKER, 
General  Manager  New  Orleans  Chamber  of  Commerce, 

New  Orleans,  La. 
98257°— 15 34 


530 


PAN   AMERICAN   FINANCIAL   CONFERENCE. 


CUBA. 


F.  Q.  BROWN,  Chairman, 
Of  Redmond  &  Co., 
New  York  City. 

PAUL  FULLER, 

Of  Coudert  Bros., 
New  York  City. 


FAIRFAX  HARRISON, 

President  Southern  Ry.  Co., 
Washington. 


G.  C.  TAYLOR, 

President  American  Express 
Co., 
New  York  City. 

JAMES  SPEYER, 

Of  James  Speyer  &  Co., 

New  York  City. 

DOMINICAN  REPUBLIC. 


Prof.  JACOB  H.  HOLLANDER, 
Chairman, 

Johns  Hopkins  University, 
Baltimore,  Md. 

CHARLES  E.  FALCONER, 

President  Merchants  &  Man- 
ufacturers Association, 
Baltimore,  Md. 

DAVID  H.  G.  PENNY, 

Vice  president  Irving  National  Bank, 

New  York  City. 


FREDERICK  B.  JENNINGS, 

Of  Stetson,  Jennings  &  Rus- 
sell, 
New  York  City. 

W.  H.  MARSHALL, 

Of  American  Locomotive  Co., 
New  York  City. 


ECUADOR. 


JOSEPH  H.  O'NEIL,  Chairman, 
Federal  Trust  Company, 
Boston,  Mass. 

FREDERICK  H.  EATON, 

President   American    Car   & 
Foundry  Co., 
New  York  City. 

E.  M.  HERR, 

President  Westinghouse  Elec- 
tric &  Manufacturing  Co., 
East  Pittsburgh,  Pa. 


F.  I.  KENT, 

Vice  President  Bankers'  Trust 
Co., 
New  York  City. 

W.  H.LIPE, 

Vice    President    Beech 
Packing  Co., 

Canajoharie,  N.  Y. 

J.  G.  WHITE, 

Of  J.  G.  White  &  Co., 
New  York  City. 


Nut 


GUATEMALA. 


DAVID  R.  FRANCIS,  Chairman, 
St.  Louis,  Mo. 

JOHN  CLAUSEN, 

Manager,  foreign  department, 

Crocker  National  Bank, 

San  Francisco,  Cal. 


ALBA  B.  JOHNSON, 

President  Baldwin  Locomo- 
tive Works, 
Philadelphia,  Pa. 

J.   RUPERTI, 

Of  Amsinck  &  Co., 
New  York  City. 

WILLIAM  E.  WOODIN, 

Of  American  Car  &  Foundry  Co., 

New  York  City. 


PERMANENT   COMMITTEE   APPOINTMENTS. 


531 


HONDURAS. 


JOHN  S.  ARMSTRONG,  Chairman, 


Baltimore,  Md. 

OWEN  GATHRIGHT, 

Vice  President   Harbison   & 
Gathright, 

Louisville,  Ky. 


W.  E.  MANNING, 


Secretary  Youngstown  Sheet 
&  Tube  Co., 

Youngstown,  Ohio. 

SAMUEL  SACHS, 

Of  Goldman,  Sachs  &  Co., 
New  York  City. 

H.  B.  TIIAYER, 

President  Western  Electric  Co.. 
New  York  City. 

NICARAGUA. 


W.  L.  SAUNDERS,  Chairynan, 

President  IngersoU-Rand  Co., 
New  York  City. 

JAMES  BROWN, 

Of  Brown  Bros., 
New  York  City. 


GEORGE  H.  NUMSEN, 

President  National  Canners' 
Association, 
Baltimore,  Md. 

SOL  WEXLER, 

President    Whitney    Central 
National  Bank, 
New  Orleans,  La. 

Professor  JEREMIAH  W.  JENKS, 
New  York  University, 
New  York. 


PANAMA. 


S.  L.  SCHOONMAKER,  Chairman, 
American  Locomotive  Works, 
New  York  City. 

NELSON  A.  GLADDING, 

Vice  President  E.  C.  Atkins 
&  Co., 
Indianapolis,  Ind. 


THOMAS  F.  CREAN, 

Of    Remington    Typewriter 
Co., 
New  York  City. 

H.  K.  MlJLFORD, 

President  H.  K.  Mulf ord  Co., 
Philadelphia,  Pa. 


R,  G.  RHETT,  Charleston,  S.  C. 


PARAGUAY. 


LEWIS  E.  PIERSON,  Chairman, 
President  Austin,  Nichols  & 
Co., 
New  York  City. 

CHARLES  MUCHNIC, 

Foreign    Sales    Department, 
American  Locomotive  Co., 
New  York  City. 

ROBERT  H.  PATCHIN, 

Secretary  National  Foreign  Trade  Council, 
New  York  City. 


ROBERT  F.  MADDOX, 

Of  American  National  Bank, 
Atlanta,  Ga. 

JOHN  R.  MORRON, 

President     Atlas     Portland 
Cement  Co., 
New  York  City. 


532 


PAN   AMERICAN   FINANCIAL   CONFERENCE. 


PERU. 


JOHN  H.  FAHEY,  Chairman, 

President  Chamber  of  Com- 
merce of  the  United  States, 
Boston,  Mass. 

KOGER  W.  BABSON, 

Boston,  Mass. 


WILLIAM  BUTTERWORTH, 
President  Deere  &  Co., 
Moline,Tll. 

WILLIAM  LOEB,  Jr., 

American  Smelting  &  Refin- 
ing Co., 
New  York  City. 

C.  D.  MITCHELL, 

Chattanooga  Plow  Co., 

Chattanooga,  Tenn. 

SALVADOR. 


W.  S.  ROWE,  Chairman, 

President      First      National 
Bank, 

Cincinnati,  Ohio. 
T.  H.  GIVEN, 

President   Farmers'  Deposit 
and  National  Bank, 
Pittsburgh,  Pa. 


ELLIOT  H.  GOODWIN, 

Secretary  Chamber  of  Com- 
merce of  the  United  States, 
Washington,  D.  C. 

GEORGE  S.  MAHANA, 

Of  Corn  Products  Refining 
Co., 
New  York  City. 


EUGENE  P.  CARVER, 
Boston,  Mass. 


URUGUAY. 


HARRY  A.  WHEELER,  Chairman, 
Vice  president  Union  Trust 
Co., 

Chicago,  111. 

A.  M.  HARRIS, 

President    Harris    Trust    & 
Savings  Bank, 
Chicago,  111. 


W.  S.  KIES, 

Of  National  City  Bank, 
New  York  City. 

E.  P.  THOMAS, 

President      United       States 
Steel  Products  Co., 
New  York  City. 


DANIEL  G.  WING, 

President  First  National  Bank, 

Boston,  Mass. 


VENEZUELA. 


H.  G.  P.  DEANS,  Chairman, 

Manager  foreign  department 
Merchants  Loan  &  Trust 
Co., 

Chicago,  111. 

E.  A.  DE  LIMA, 

58  West  Sixth  Street, 
New  York  City. 

WILLIAM  P.  WILSON, 

Director  Commercial  Museum, 

Philadelphia,  Pa. 


W.  C.  POTTER, 

Of  Guaranty  Trust  Co., 
New  York  City. 

I.  N.  SELIGMAN, 

Of  J.  &  W.  Seligman, 
New  York  City. 


GENERAL  MEMORANDA 


533 


MEMORANDUM  SUBMITTED  BY  DR.  R.  C.  ALDAO,  ARGENTINE 
DELEGATE,  IN  SUPPORT  OF  THE  DRAFTS  OF  RESOLU- 
TIONS PRESENTED  BY  HIM  TO  THE  CONFERENCE 
ON  UNIFORMITY  OF  COMMERCIAL  LAW,  MARI- 
TIME TRANSPORTATION,  AND  THE  CREATION 
OF  AN  INTERNATIONAL  COMMITTEE  OF 
COMMERCIAL  ARBITRATION 


535 


MEMOBANDTJM  SUBMITTED  BY  DR.  R.  C.  ALDAO,  ARGENTINE 
DELEGATE  TO  THE  PAN  AMERICAN  FINANCIAL  CONFERENCE, 
IN  SUPPORT  OF  THE  DRAFTS  OF  RESOLUTIONS  PRESENTED  BY 
HIM  TO  THE  CONFERENCE  ON  UNIFORMITY  OF  COMMERCIAL 
LAWS,  MARITIME  TRANSPORTATION,  AND  THE  CREATION  OF 
AN  INTERNATIONAL  COMMITTEE  OF  COMMERCIAL  ARBITRA- 
TION. 


The  Pan  American  policy  fostered  by  the  United  States  and  from 
which  so  many  benefits  may  be  expected  by  the  Republics  of  Amer- 
ica is  completing  its  evolution. 

The  action  of  this  policy  was  limited  until  a  short  time  ago  to  the 
maintenance  of  relations  tending  principally  to  the  furnishing  of 
reciprocal  information  among  the  countries  making  up  the  Pan 
American  Union. 

It  may  perhaps  be  said  that  it  was  not  until  1914  that  this  policy 
of  continental  solidarity  attained  its  first  practical  success  by  ren- 
dering possible  the  mediation  of  Argentina,  Brazil,  and  Chile,  which 
brought  to  a  happy  close  the  grave  situation  created  by  the  differences 
between  the  Government  of  the  United  States  and  Victoriano  Huerta 
of  Mexico. 

This  conference  which  has  brought  together  the  representatives  of 
almost  all  the  Latin  American  Republics  for  the  consideration  of 
financial  and  commercial  matters,  constitutes  the  most  efficient  in- 
itiative toward  obtaining  results,  mutually  advantageous. 

The  development  of  public  wealth  and  its  establishment  upon  a 
solid  basis  by  facilitating  the  realization  of  individual  welfare  is 
what  gives  an  impulse  to  and  marks  the  route  to  be  followed  by  the 
international  policy  of  the  nations  whose  progress  must  serve  as  an 
example  to  the  young  Republics  of  America.  And  it  is  for  this  rea- 
son that,  as  an  act  of  strict  justice,  sincere  applause  should  be  ex- 
tended to  the  Secretary  of  the  Treasury,  the  initiator  of  this  con- 
ference. 

In  so  doing,  the  Argentine  delegation  is  gratified  to  look  upon  it 
as  an  augury  of  a  new  and  fruitful  era  in  the  Pan  American  policy. 

537 


538  PAK   AMERICAN   FINANCIAL   CONFERENCE. 

GENERAL  REMARKS. 

The  economic  prosperity  of  the  Latin  Eepublics  of  America,  in  my 
opinion,  calls  for  the  concurrent  action  of  three  main  factors : 

a)  The  regulated  increase  of  their  population  by  the  incorpora- 
tion of  men  capable  of  cultivating  and  making  productive  the  exten- 
sive area  of  agricultural  lands,  now  sterile  owing  to  a  scarcity  of 
population. 

1)  The  permanent  or  at  least  long-time  investment  of  more  capi- 
tal, permitting  the  development  of  their  industries,  the  establishment 
of  easy  internal  and  external  communications,  and  the  increase  of 
banking  facilities  called  for  by  the  development  of  international 
commerce. 

c)  The  widening  of  their  commercial  radius  of  action  by  the  in- 
crease of  the  markets  for  their  products  and  by  the  attraction  of 
offers  of  manufactures  of  foreign  industry,  for  the  purpose  of  im- 
proving the  conditions  governing  the  sale  of  their  domestic  produc- 
tion and  the  purchase  of  manufactured  goods  to  supply  their  own 
consumption. 

With  reference  particularly  to  my  own  country — the.  Argentine 
Republic — I  would  say  that  the  first  point  mentioned  is  not  yet  of 
urgent  importance  in  the  relations  which  bind  Argentina  together. 
The  immense  population  of  the  United  States  does  not  as  yet  exceed 
the  productive  capacity  of  her  territory,  and  therefore  there  can  not 
be  expected  for  the  present  the  establishment  of  a  regular  current  of 
North  American  immigration  to  the  shores  of  Argentina. 

But  it  is  to  be  expected  that  before  the  lapse  of  many  years  the 
colossal  development  of  the  United  States  will  direct  thoughts  to- 
ward the  advisability  of  promoting  the  emigration  of  those  who  are 
unable  at  the  time  to  find  easily  means  of  livelihood  owing  to  the 
overflowing  population. 

And  it  is  also  to  be  hoped  that  then — in  that  future  which  I  ven- 
ture to  trust  is  very  near — the  American  emigrant  will  consider  it 
advantageous  to  transfer  his  work  a'nd  capacity  to  Argentina,  where, 
with  similar  conditions  of  climate,  fertile  lands  which  fully  com- 
pensate the  efforts  devoted  to  their  cultivation,  and  all  the  con- 
veniences attendant  upon  the  most  complete  civilization,  the  ener- 
getic man  will  find  as  adequate  if  not  greater  reward  for  his  labor 
than  in  any  other  part  of  the  world. 

Permit  me  incidentally  to  call  attention  to  the  fact  that  Argentina 
has  unoccupied  lands  for  sale  or  lease  of  sufficient  area  to  amply  com- 
pensate the  labor  of  a  population  tenfold  her  present  population,  and 
that  those  lands  are  suitable  for  the  cultivation  of  all  the  products 
of  any  climate.  Taking  only  the  ten  national  territories  of  which  the 
Argentine  Republic  consists,  apart  from  the  fourteen  confederated 


MEMORANDUM  BY  DE.   E.   C.  ALDAO.  539 

Provinces,  they  have  at  the  present  time  a  total  area  of  81,825,000 
hectares,  or  202,000,000  acres  of  excellent  land,  the  property  of  the 
Government  of  the  Nation,  destined  to  be  leased  or  sold  for  private 
exploitation  under  exceptionally  favorable  conditions  by  the  immi- 
grant coming  to  Argentina  with  the  capacity  and  energy  necessary 
to  work  out  his  future. 

Permit  me  also  to  call  attention  to  the  fact  that  in  Argentina  the 
laws  governing  immigration  are  liberal  and  extend  to  the  immigrant 
extraordinary  facilities  for  becoming  the  owner  of  the  land  he  tills ; 
and  that  the  extensive  works  of  irrigation  which  have  been  in  course 
of  construction  for  a  number  of  years,  the  first-class  port  accommoda- 
tions, and  an  excellent  railway  service  covering  over  34,000  kilometers, 
admits  of  the  successful  intensive  cultivation  of  select  fruits  and 
vegetables  at  a  profit  exceeding  that  obtainable  in  the  most  prosper- 
ous agricultural  section  of  the  world. 

In  order  better  to  appreciate  the  productive  capacity  of  Argentina 
and  the  intense  and  efficient  labor  found  there,  attention  may  perhaps 
be  called  to  the  fact  that  that  country,  with  a  population  of  only 
about  9,000,000,  all  of  the  Caucasian  race,  last  year  exported  cereals 
and  other  agricultural  products  to  an  amount  in  excess  of  400  millions 
of  American  bushels,  in  addition  to  large  quantities  of  chilled  and 
frozen  meats,  wool,  hides,  tallow,  and  other  products  of  the  cattle 
industry,  the  total  sale  price  of  which  exceeded  500  millions  of 
dollars. 

May  I  be  permitted,  then,  to  contemplate  as  a  happy  prospect  for 
my  country  the  hope  that  when  the  already  enormous  population  of 
the  United  States  shall  have  increased  to  the  point  of  absorbing  the 
supporting  capacity  of  its  soil,  it  will  be  Argentina  to  which  Amer- 
ican emigrants  will  transfer  their  homes  in  the  search  for  a  com- 
mensurate reward  for  the  efforts  of  their  intelligence  and  their 
labors. 

MUTUAL  CONFIDENCE. 

With  respect  to  the  problems  of  a  financial  and  banking  character, 
of  so  much  interest  to  the  prosperity  of  my  country,  they  will  be 
treated  in  this  conference  by  my  colleague  on  this  delegation  and 
distinguished  friend,  Mr.  Samuel  Hale  Pearson,  while  I,  on  my  part, 
will  confine  myself  more  particularly  to  that  which  relates  to  the 
fuller  development  of  the  commercial  relations  between  the  United 
States  of  America  and  the  Argentine  Republic. 

In  discharging  the  task  with  which  my  Government  has  honored 
me,  I  shall  seek  to  set  forth  as  concisely  as  possible  the  present  state 
of  the  commercial  relations  involved  and  the  measures  of  a  practical 
character  which,  in  my  judgment,  might  be  employed  to  further  the 


540  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

full  attainment  of  the  ends  had  in  view  in  carrying  out  the  happy 
idea  of  holding  this  conference. 

I  believe  that  the  concurrence  of  two  essential  elements  is  neces- 
sary to  an  increase  of  international  commerce :  That  the  contracting 
parties  have  mutual  confidence  in  each  other  and  that  both  expect 
the  legitimate  profit  inherent  in  every  commercial  transaction. 

It  is  unnecessary  to  say  anything  in  regard  to  the  second  of  these 
elements,  inasmuch  as  the  price  from  which  the  profit  is  to  be  derived 
is  a  consequence  of  the  eternal  law  governing  the  offer,  and  the  de- 
mand which  does  not  admit  of  any  regulation  altering  its  natural 
consequences. 

But,  on  the  other  hand,  mutual  confidence  admits  of  encourage- 
ment, in  order  to  convince  the  party  with  whom  a  contract  is  entered 
into,  that  it  is  entered  into  with  that  good  faith  which  should  always 
be  paramount  in  a  commercial  transaction. 

In  all  parts  of  the  world  there  are  dishonest  merchants,  and  it  is 
particularly  for  the  purpose  of  avoiding  the  consequences  of  their 
improper  conduct  that  it  is  advisable  to  adopt  measures  of  a  legal 
character  to  defend  those  whose  conduct  is  above  reproach. 

Furthermore,  I  have  personally,  in  a  professional  capacity,  had 

opportunity  to  observe  certain  deficiencies  in  the  commercial  laws  in 

force  in  the  Argentine  Republic  and  in  some  of  the  states  of  your 

country,  which  do  not  favor  as  they  should  the  situation  of  the  mer- 

*chant  who  sells  on  credit  to  customers  residing  abroad. 

I  likewise  believe  that  it  would  be  advisable  to  recommend  the 
enactment  of  legal  measures  granting  the  vendor  of  merchandise  a 
lien  thereon  for  its  price  as  long  as  the  merchandise  continues  in  the 
possession  of  the  purchaser  and  can  be  identified,  to  which  end  the 
removal  by  the  purchaser  of  the  trade  or  other  marks  whereby  the 
manufacturer  distinguishes  his  products  should  be  punished  as  a 
fraud. 

It  would  also  be  advisable  to  save  international  commerce  the 
delays,  expenses,  and  sundry  difficulties  arising  as  a  consequence  of 
differences  in  contracts  of  an  international  character,  which  force  the 
vendor  or  purchaser  to  have  recourse  to  the  ordinary  courts  of  a 
foreign  and  distant  country. 

It  is  in  pursuance  of  these  ideas  that  I  have  permitted  myself  to 
draft,  for  submission  to  the  consideration  of  the  conference,  the 
project  of  a  resolution  recommending  to  the  respective  Governments 
the  adoption  of  certain  measures  tending  to  inspire  and  maintain 
confidence  between  the  merchants  of  this  country  and  Argentina, 
and  another  project  providing  for  the  establishment  of  an  interna- 
tional committee  of  commercial  arbitration,  to  operate  in  New  York 
and  in  Buenos  Aires,  for  the  purpose  of  settling  equitably  and 
promptly,  without  judicial  proceedings,  without  stamped  paper,  and. 


MEMORANDUM  BY  DR.   R.   C.  ALDAO.  541 

if  possible,  even  without  the  intervention  of  lawyers,  any  differences 
arising  through  commercial  transactions  between  the  residents  of  the 
two  countries. 

INTERNATIONAL    TRADE. 

I  believe  that  from  their  respective  points  of  view  the  interests  of 
the  American  manufacturer  and  the  Argentine  consumer  are  .very 
similar  and  it  is  to  their  mutual  advantage  to  support  each  other. 

The  aim  of  the  American  manufacturers,  now  that  their  ordinary 
outlet  to  Europe  has  to  a  certain  extent  become  reduced,  must  be  to 
increase  the  number  of  their  customers  elsewhere  in  order  to  be  able 
to  dispose  of  the  excess  of  their  production  which  formerly  went 
abroad,  and  also  of  the  possible  excess  of  their  production  for  do- 
mestic consumption.  On  the  other  hand,  the  Argentine  consumer  is 
vitally  interested  in  obtaining  more  competition  in  the  offer  of  goods 
he  is  now  purchasing,  with  the  hope  of  obtaining  better  quality  and 
lower  prices. 

This  is  perhaps  a  good  opportunity  of  letting  American  manu- 
facturers know  that  the  local  Argentine  trade  is  by  no  means  in  the 
hands  of  Argentinians. 

The  import  trade  of  Argentina  is  principally  in  the  hands  of  the 
English,  Germans,  French,  Italians,  Belgians,  and  Spaniards  (the 
volume  of  trade  each  is  doing  probably  being  in  the  order  stated), 
who,  as  may  be  readily  understood,  prefer  to  deal  with  the  manu- 
facturers of  their  respective  native  countries. 

I  wish  to  state  that  in  these  last  few  words  the  situation  is  plainly 
summarized,  and  they  explain  why  American  industry,  which  can 
produce  almost  anything  of  the  best  quality  and  with  the  best  work- 
manship and  material,  has  not  as  yet  been  able  to  obtain  in  many 
lines  the  trade  done  by  its  European  competitors. 

The  United  States  exports  to  Argentina  but  a  very  small  propor- 
tion of  certain  manufactured  articles  which  their  industry  produces 
in  abundance  and  which  are  consumed  in  Argentina  in  great  quan- 
tities. 

Woolen  textiles,  clothing  and  underwear,  shoes,  hats,  furniture, 
railroad  and  tramway  supplies,  galvanized  sheet  iron,  manufactures 
of  iron  and  steel,  iron  pipes,  sanitary  supplies,  kitchen  utensils,  glass 
and  crystal  ware,  automobiles,  pianos  and  other  musical  instruments, 
as  well  as  numerous  other  products  of  American  industry,  are  im- 
ported from  the  United  States  to  my  country  in  very  small  propor- 
tional amounts.  It  is  to  be  noted  as  a  characteristic  case  that  al- 
though Argentina  is  the  greatest  coal-consuming  country  in  the 
world  in  relation  to  her  population,  spending  no  less  than  $40,000,000 
gold  per  annum  for  that  commodity,  American  coal  the  production 
of  which  is  far  in  excess  of  domestic  needs,  does  not  figure  in  any 


542  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

amount  worthy  of  mention  among  the  countries  supplying  us  with 
that  article  of  prime  necessity. 

In  order  to  change  this  state  of  affairs  in  favor  of  the  American 
manufacturer  and  the  Argentine  consumer,  it  is  necessary  to  estab- 
lish American  wholesale  importing  houses  in  Buenos  Aires  and  some 
of  the  other  principal  cities  of  Argentina,  and  it  is  for  these  firms 
to  see  about  getting  orders  from  the  Argentine  retail  dealers,  and  in 
turn  give  their  orders  to  their  own  people. 

The  American  local  houses  should  endeavor  to  become  thoroughly 
acquainted  with  the  needs  and  demands  and  customs  of  the  retail 
trade  and  with  local  conditions  generally,  in  order  that  they  may  be 
in  a  good  position  to  advise  the  home  manufacturers  of  what  the 
Argentine  public  wants. 

Another,  and  perhaps  easier  and  more  practical  form,  would  be  to 
establish  in  Buenos  Aires  one  or  more  large  stores  for  the  exhibi- 
tion and  sale  of  American  products.  This  would  put  the  American 
manufacturer  in  more  direct  touch  with  the  Argentine  consumer. 

The  American  manufacturers  of  products  which  find  an  easy  sale 
in  Argentina  should  make  the  necessary  financial  arrangements  to 
establish  in  Buenos  Aires  the  American  exhibition  suggested,  where, 
under  the  direction  of  clever  salesmen  acquainted  with  local  needs 
and  tastes,  American  industry  could  easily  compete  with  European 
manufacturers,  who  have  heretofore  almost  monopolized  some  of 
the  largest  lines  of  the  Argentine  market. 

I  might  say  that  there  is  not  the  slightest  reason  why,  on  similar 
terms,  the  Argentine  consumer  should  not  buy  from  the  American 
manufacturer  rather  than  from  the  European.  Quality  and  low 
price  are  the  principal  factors  in  Argentina,  as  they  are  in  all  other 
parts  of  the  world,  and  these  are  the  very  simple  ways  by  which 
the  Argentine  consumer  can  be  reached. 

I  wish  to  state  most  emphatically  that  there  is  no  prejudice 
in  Argentina  against  American  products  or  American  manufac- 
turers, business  being  merely  a  question  of  price,  and,  of  course, 
the  meeting  of  local  conditions.  And  if  it  were  necessary  to  dissipate 
any  doubt  which  may  still  remain  in  this  particular,  it  will  be  suffi- 
cient in  order  to  do  so  to  call  attention  to  the  fact  that  the  Argentine 
Government,  after  having  called  for  and  received  bids  from  the 
principal  shipbuilding  companies  of  England,  Germany,  France, 
and  Italy,  decided  to  intrust  to  the  American  naval  industry,  which 
presented  the  best  terms,  the  construction  of  the  two  powerful  vessels 
of  28,000  tons  each  for  a  contract  price  of  $25,000,000  gold,  and 
which,  under  the  names  of  Rivadavia  and  Moreno — glorious  in  the 
history  of  Argentina — were  recently  added  to  the  navy  of  my 
country. 


MEMORANDUM   BY  DB.    E.    C.   ALDAO.  543 

But  you  must  always  bear  in  mind  that  the  primary  need  is  for 
American  products  to  become  known  to  the  Argentine  consumers; 
and  when  this  has  once  been  accomplished,  there  is  no  doubt  at  all  in 
my  opinion  that  the  Argentine  consumer  will  readily  appreciate  the 
products  placed  before  him  by  the  manufacturers  of  the  great  Re- 
public of  the  North.  •  ^ 

FAST  MARITIME  SERVICE. 

One  of  the  most  important  problems  relating  to  the  increase  of 
business  relations  between  the  United  States  and  Argentina  is  that 
which  refers  to  maritime  communication. 

It  is  not  with  a  purpose  of  criticism,  but  merely  to  mention  a  pat- 
ent fact,  that  I  wish  to  say  that  for  25  years  past  the  duration  of 
the  trip  between  Buenos  Aires  and  Europe  has  been  17  days,  and 
even  less,  while  the  voyage  between  Buenos  Aires  and  New  York 
can  not  be  made  at  the  present  time  in  less  than  22  days,  and  it  fre- 
quently happens  that  correspondence  between  the  two  ports  is  not 
received  until  25  or  even  30  days  have  passed. 

And,  nevertheless,  for  the  proper  development  of  business  rela- 
tions between  this  country  and  Argentina,  it  is  essential  to  establish 
and  maintain  a  regular  service  of  fast  steamers  furnishing  travelers 
comforts  equal  to  those  which  have  been  furnished  for  a  long  time 
back  by  the  European  lines. 

I  think  that  everybody  will  agree  that,  under  ordinary  circum- 
stances, a  fast  maritime  service  can  be  obtained  only  as  a  natural 
consequence  of  an  increase  in  passenger  and  freight  traffic.  And 
I  regret  to  have  to  say  that,  in  my  judgment,  the  maritime  traffic 
between  this  country  and  Argentina  has  not  as  yet  attained  sufficient 
importance  to  give  a  reasonable  return  on  the  capital  which  would 
have  to  be  invested  in  order  to  establish  the  service  in  question. 

One  of  the  greatest  difficulties  in  the  way  of  obtaining  what  is 
sought,  is  due  to  the  lack  of  coal  in  Argentina,  which  fact  compels 
steamers  to  purchase  a  part  of  their  coal  there  with  the  additional 
cost  of  transporting  said  fuel  from  England,  which  is  the  country 
which  supplies  almost  all  the  coal  we  consume. 

Another  equally  grave  difficulty  is  due  to  the  scarcity  of  return 
cargoes,  inasmuch  as  the  exportation  of  products  of  Argentina  to 
the  United  States  has  been  less  than  the  importation  of  American 
products  to  Argentina  ($26,863,732  of  Argentine  products  as  against 
$52,894,834  of  American  products  during  the  past  year),  which  has 
resulted  in  some  of  the  vessels  plying  heretofore  between  the  two 
countries  not  being  able  to  secure  sufficient  cargo  for  their  return 
trip. 

But  I  venture  to  predict  that  the  two  difficulties  mentioned  are 
destined  to  disappear  in  the  not  far  distant  future. 


544  PAN  AMERICAN   FINANCIAL  CONFERENCE. 

In  Argentina  there  have  been  recently  discovered  very  important 
deposits  of  petroleum,  the  ownership  of  which  the  Government  has 
retained  and  will  not  transfer.  Their  exploitation  has  already  been 
started  in  such  form  that  a  production  of  liquid  fuel  of  200,090 
tons  for  the  first  year  may  be  counted  on  in  a  few  months,  and  which 
is  destined  in  a  few  years  *more  to  attain  proportions  which  will 
substitute  a  large  part  of  foreign  fuel.  And  I  am  certain  that  the 
Argentine  Government  would  be  glad  to  give  preference  in  supply- 
ing fuel  to  the  steamers  taking  charge  of  a  fast  maritime  service  of 
the  first  class  between  my  country  and  the  United  States. 

On  the  other  hand,  the  extraordinary  increase  in  the  population  of 
this  country,  which  is  relatively  greater  than  that  of  its  production 
of  food  products,  must  have  as  a  result  a  progressive  and  constant 
increase  in  the  importation  of  such  products  from  Argentina.  It  is 
a  well-known  fact  that  during  the  past  few  months  the  commerce 
of  importation  of  Argentine  meats  has  been  initiated  with  excellent 
prospects  and  is  destined  in  a  short  time  to  attain  a  notable  develop- 
ment; and  it  is  also  to  be  expected  that  in  the  very  near  future 
American  agriculture  will  not  be  able  to  produce  certain  cereals  in  a 
sufficient  amount  to  provide  for  its  own  consumption,  and  it  will 
then  be  that  Argentine  wheat,  corn,  and  flax  will  be  naturally  im- 
ported to  fill  such  needs. 

The  present  European  war  also  furnishes  an  extraordinary  oppor- 
tunity for  increasing  the  importation  of  certain  Argentine  products 
which  heretofore  have  been  sent  principally  to  some  of  the  bellig- 
erent countries. 

This  increase  in  the  importation  of  Argentine  products  has  been 
noted  specially  in  hides;  and  it  is  very  probable  that  American  in- 
dustry will  consider  it  advisable  to  import  on  a  larger  scale  the  wood 
called  "quebracho,"  which  Argentina  has  heretofore  sent  in  very 
large  amounts  to  Germany  for  the  extraction  of  the  tannin  used  so 
successfully  in  the  tanning  industry. 

When  these  promising  prospects  become  converted  into  facts  the 
obstacles  which  are  the  main  ones  in  the  way  of  the  establishment 
of  the  fast  maritime  service  of  which  I  am  treating  will  have  been 
surmounted. 

But  it  is  a  fact  that  the  satisfaction  of  the  need  of  a  fast  mari- 
time service  affects  so  greatly  the  interest  of  both  countries  that  it  is 
probable  that  their  Governments  may  consider  that  the  opportunity 
has  come  for  providing  the  means  necessary  for  obtaining  this 
result  immediately  and  without  awaiting  it  as  a  natural  consequence 
of  the  increase  in  traffic. 

The  President  of  the  United  States,  when  he  delivered  in  the 
Pan  American  Union  his  address  of  welcome  to  the  delegates  of  the 
Latin  Republics,  said  very  specifically  that  not  only  rapid  means  of 
shipping  facilities  with  South  America  constitutes  a  public  necessity, 


MEMORANDUM  BY  DR.   R.   C.   ALDAO.  545 

the  discharge  of  which  should  not  be  delayed,  but  that  also  the 
Governments  of  the  countries  interested  in  it  should  give  their 
assistance  in  every  way  possible,  so  that  this  may  be  accomplished 
without  any  further  delay. 

I  am  satisfied  that  the  men  who  govern  my  country  are  of  the  same 
opinion  as  that  of  your  distinguished  First  Magistrate,  and,  in  fact, 
it  may  be  that  this  is  an  opportune  occasion  to  remember  that  a 
policy  of  furthering  or  advancing  the  progress  of  the  nation  have 
precedents  in  the  Argentine  Republic,  where  the  National  Govern- 
ment has  invested  large  sums  in  the  building  of  railroads  in  the 
southern  part  of  the  country  where  the  population  is  not  sufficiently 
great  to  immediately  bring  a  return  on  such  investments,  and  where, 
consequently,  it  was  not  possible  to  induce  private  enterprise  to  take 
the  business  in  hand.  The  only  purpose  of  that  initiative  was  the 
development  of  sections  which  are  perfectly  suited  for  agriculture 
or  cattle  raising,  and  which  could  not  be  undertaken  owing  to  a  lack 
of  good  communications  with  the  ports. 

Therefore,  in  order  to  attain  the  result  sought  without  too  much 
delay,  it  would  be  essential  for  the  two  Governments  interested  that 
either  to  acquire  with  their  own  resources  and  manage  the  new  fast 
steamers  in  question  or  that  they  compensate  sufficiently  any  private 
companies  desirous  of  taking  charge  of  such  fast  service. 

The  first  form  presents,  in  my  opinion,  grave  inconveniences,  as 
experience  has  demonstrated  in  other  countries.  The  public  admin- 
istration is  not  generally  prepared  to  manage  affairs  of  this  char- 
acter; and,  on  the  other  hand,  it  would  not  be  equitable  for  the 
Governments  to  themselves  initiate  a  strong  commercial  competition 
against  established  navigation  companies  which  have  up  to  the 
present  met  the  necessities  of  international  traffic  as  far  as  possible. 
I  think  that  I  can  affirm  that  the  Argentine  Government  will  not  con- 
sider it  advisable  to  become  the  owner  and  manager  of  a  commercial 
shipment  concern. 

It  is  for  this  reason  that  I  believe  that  compensation  by  the  Gov- 
ernments to  private  enterprises  is  the  most  convenient  form  of 
attaining  the  result  sought. 

I  wish  to  note  that  I  have  employed  the  word  "  compensation  "  and 
not  "subsidy,"  in  order  to  avoid  any  misunderstanding  regarding 
the  idea  I  permit  myself  to  advance. 

If  a  private  company  should  establish  a  service  of  communications 
of  the  first  class,  enabling  the  voyage  to  be  made  between  the  United 
States  and  Argentina  in  16,  or  perhaps  15  days,  instead  of  23,  it 
would  have  to  incur  extra  running  expenses  in  fuel  and  personnel 
for  a  large  amount,  apart  from  the  necessary  large  initial  investment 
of  capital;  and  that  capital  and  those  expenses  would  produce  in 
favor  of  international  commerce  the  most  important  benefit  of 
98257°— 15 35 


546  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

bringing  about  the  delivery  of  bills  and  other  documents  required 
by  international  exchange,  of  merchandise  sent  and  received,  and  of 
the  mail  exchanged  at  their  respective  destinations,  one  week  sooner 
than  is  the  case  at  the  present  time,  thus  reducing  by  one-third  the 
loss  of  time  required  to  cover  the  distance  which  separates  the  two 
countries. 

It  is  therefore  a  question  of  obtaining  positive  benefits,  and  when 
compensation  is  given  it  should  not  be  understood  that  a  gratuity 
is  offered  to  the  navigation  companies,  but  that  adequate  remunera- 
tion is  given  them  for  a  service  upon  which  they  are  fairly  entitled 
to  earn  a  proper  return. 

It  is  in  pursuance  with  these  ideas  that  I  have  permitted  myself 
to  prepare  for  its  consideration  a  project  of  resolution  tending  to 
meet  the  necessity  so  much  felt  in  this  country  as  well  as  in  my  own, 
of  a  service  of  maritime  communication  combining  the  conditions 
of  speed  and  comfort  called  for  by  an  increase  in  commercial  rela- 
tions; and  I  am  glad  to  say  that  said  project  has  deserved  the  ap- 
proval of  the  delegations  of  Brazil  and  Uruguay  who  have  agreed  in 
its  present  wording. 

In  the  meantime,  in  order  to  overcome  some  of  the  present  diffi- 
culties which  maritime  commerce  encounters,  I  believe  that  it  is 
urgently  necessary  for  the  Governments  of  the  countries  interested 
to  adopt  efficient  measures  to  prevent  the  delays  now  often  suffered 
owing  to  deficiencies  in  the  consular,  sanitary,  and  customs  service 
which  we  have  all  had  occasion  to  observe  in  traveling  between 
Buenos  Aires  and  New  York. 

And  I  also  believe  that  it  would  be  most  advisable  that  the  Gov- 
ernments of  the  countries  interested  take  the  necessary  steps  to 
cheapen  the  cost  of  cable  communication,  as  the  most  efficient  means 
of  overcoming  as  much  as  possible  the  difficulties  inherent  in  the 
long  distances  which  separate  some  of  the  Kepublics  of  America  from 
each  other,  especially  whilst  the  fast  maritime  service  is,  as  it  is  at 
present,  only  a  cherished  hope. 

In  this  way  I  have  attempted  to  summarize  my  small  contribu- 
tion to  the  labors  of  the  Pan  American  Financial  Conference.  In 
fulfilling  my  obligation  toward  the  common  task,  may  I  be  per- 
mitted to  express  my  deepest  appreciation  to  the  Republics  of 
America  who  have  assembled  their  representatives  for  the  purpose 
of  considering  and  elucidating  financial  and  commercial  problems 
that  affect  their  future  prosperity.  They  are  thus  giving  to  the 
world  the  greatest  example  of  brotherhood  and  culture,  which  is  so 
much  more  worthy  of  praise  if  we  recall  that  in  some  of  the  oldest 
European  nations,  who  have  heretofore  been  the  leaders  of  civiliza- 
tion, it  would  now  seem  that  even  the  most  elementary  principles  of 
justice  and  humanity  have  been  forgotten  and  even  deliberately 
discarded. 


APPENDIX. 
GENERAL   SUGGESTIONS. 


I. 

SUGGESTIONS  ON  PAN  AMERICAN  UNIFORMITY  IN  MATTERS  AFFECTING 
THE  DEVELOPMENT  OF  INTERNATIONAL  COMMERCE. 

1.  The  adoption  of  the  25-cent  piece  as  a  monetary  unit  for  all  the 
Republics  of  America. 

2.  The  obligatory  establishment  in  all  the  Republics  of  America 
of  the  metric  decimal  system  of  weights  and  measures. 

3.  The  suppression  in  the  United  States  of  all  import  duties  on 
food  .products  of  prime  necessity. 

4.  The  establishment  of  the  mutual  exchange  of  parcel-post  up  to 
a  weight  of  5  kilograms. 

5.  The  making  uniform  of  documents  necessary  in  international 
commerce,  such  as  bills  of  exchange,  charter  parties,  and  maritime 
bills  of  lading. 

6.  The  making  uniform  of  consular,  sanitary,  and  customs  pro- 
cedure, saving  vessels  unnecessary  delays  in  ports  of  transit  or  desti- 
nation. 

7.  The  grant  to  the  vendor  of  merchandise  a  lien  on  the  goods 
sold  by  him  for  the  recovery  of  the  price  thereof  while  in  the  pos- 
session of  the  purchaser  and  while  their  identification  is  possible. 

8.  Provision  for  the  punishment  as  a  fraudulent  act  the  action  of 
a  purchaser  who  eliminates  the  trade  or  other  marks  of  identifica- 
tion on  the  merchandise  purchased  by  him,  the  price  of  which  he 
has  not  yet  paid  in  whole  or  in  part. 

9.  Prohibition  and  punishment  as  fraudulent  of  the  pledge  or 
pawn  of  merchandise  the  price  of  which  has  not  yet  been  paid. 

10.  The  imposition  upon  the  merchant  of  the  obligation  of  enter- 
ing upon  his  books  all  details  relating  to  the  sale  by  him  of  merchan- 
dise the  price  of  which  he  has  not  yet  paid. 

11.  The  elimination  from  the  customs  laws  of  the  so-called  ad 
valorem  duties,  or  the  severe  punishment  of  customs  declarations  by 
importers  reducing  the  value  of  the  merchandise  imported. 

12.  The  regulation  of  the  registry  of  trade-marks  which  are  already 
registered  and  are  well  known  in  other  countries. 

547 


548  PAN  AMEKICAN  FINANCIAL  CONFERENCE. 

II. 

PRELIMINARY  DRAFT  OF  A  RESOLUTION  ON  INTERNATIONAL  COMMERCIAL 

ARBITRATION. 

The  Pan  American  Financial  Conference,  after  due  consideration, 
has  resolved  to  recommend  that,  by  mutual  agreement  between  the 
Government  of  the  United  States  of  America  and  the  Government 
of  the  Argentine  Republic,  measures  be  adopted  tending  to  carry  into 
effect  the  following  agreement : 

ARTICLE  1.  There  is  hereby  established  the  International  Committee  of  Com- 
mercial Arbitration  for  the  purpose  of  furthering  a  more  effective  settlement 
of  any  differences  arising  in  connection  with  the  performance  of  commercial 
contracts  of  an  international  character. 

ART.  2.  The  committee  shall  consist  of  two  sections,  one  to  be  located  in  the 
city  of  New  York  and  the  other  in  Buenos  Aires,  to  be  called  American  Sec- 
tion and  Argentine  Section,  respectively.  Each  section  shall  be  composed  of 
three  regular  members  and  three  alternate  members,  of  whom  one  regular  mem- 
ber and  one  substitute  member  shall  be  appointed  by  the  Chamber  of  Commerce 
of  the  United  States,  another  regular  and  substitute  member  by  the  Chamber 
of  Commerce  of  Buenos  Aires,  and  the  third  regular  and  substitute  members  by 
agreement  between  the  other  two  regular  members.  If  no  agreement  can  be 
reached,  the  appointment  of  the  third  member  of  each  section  and  of  his  sub- 
stitute shall  be  made  by  the  Chief  Justice  or  President  of  the  respective  Na- 
tional Supreme  Court. 

ART.  3.  In  order  to  be  eligible  to  be  a  regular  or  substitute  member  of  the  com- 
mittee, it  is  necessary  to  be  at  least  30  years  of  age  and  to  have  been  engaged 
in  commerce  in  the  respective  country  for  a  period  of  not  less  than  five  years. 
The  term  of  office  of  the  members  shall  be  two  years  and  they  may  be  reelected. 
In  case  of  absence,  sickness,  or  some  other  impediment,  the  member  of  the  com- 
mittee subject  thereto  shall  be  replaced  by  the  proper  substitute  in  the  order  of 
his  appointment  Neglect  in  the  discharge  of  his  duties,  failure  in  business,  or 
any  other  cause  affecting  his  position  or  standing  shall  operate  to  cause  a. 
member  of  the  committee  to  cease  in  office,  upon  a  declaration  to  be  made  by 
the  Chamber  of  Commerce  of  the  United  States  or  the  Chamber  of  Commerce 
of  Buenos  Aires,  as  the  case  may  be. 

ART.  4.  Each  section  of  the  committee  shall  have  the  power  to  decide  any 
differences  arising  between  residents  of  the  United  States  and  residents  of  the 
Argentine  Republic  in  connection  with  the  performance  of  commercial  contracts 
of  an  international  character.  The  place  of  performance  of  the  respective  con- 
tract shall  be  taken  as  establishing  the  section  of  the  committee  upon  which  it 
devolves  to  intervene  in  the  case. 

ART.  5.  There  shall  be  submitted  to  the  decision  of  the  respective  section  of 
the  committee  all  differences  which  may  arise  in  connection  with  the  per- 
formance of  commercial  contracts  of  an  international  character : 

(a)  Between  merchants  who  are  adherents  to  the  constitution  of  the  interna- 
tional committee  according  to  article  12. 

(6)  Between  parties  who  have  so  agreed,  even  though  not  adherents  of  the 
international  committee. 

ART.  6.  Merchants  who,  either  by  agreement  or  by  reason  of  being  adherents, 
are  to  submit  their  differences  to  arbitration  by  the  committee  shall  forward 


MEMORANDUM  BY  DR.   R.   C.   ALDAO.  549 

to  the  section  of  the  latter  at  the  place  of  the  performance  of  the  contract  a 
duplicate  of  the  contract  and  of  all  the  correspondence  exchanged  in  connection 
with  the  transaction  in  which  the  difference  has  arisen ;  and  shall,  in  addition, 
present  all  written  or  oral  proof  that  the  said  section  may  require.  The  trans- 
mission of  such  copies  and  the  presentation  of  the  proof  called  for  shall  be  made 
within  a  term  to  be  fixed  by  the  section. 

AKT.  7.  The  definite  decisions  of  the  sections  of  the  committee  shall  be 
adopted  by  a  majority  of  the  members  composing  them  and  must  be  entered  in 
a  book  to  be  kept  in  the  archives  of  each  section.  The  proceedings  had  in  con- 
nection with  any  arbitration,  as  well  as  the  documents  and  evidence  presented, 
shall  be  exempt  from  payment  of  any  stamp  or  other  tax. 

ART.  8.  The  arbitral  judgment  shall  be  rendered  within  the  shortest  period 
possible,  according  to  the  circumstances,  and  shall  contain  a  concise  decision  of 
the  case,  setting  forth  what  each  party  is  to  do,  deliver,  or  pay  to  the  other,  with 
a  determination  of  the  period  within  which  the  judgment  is  to  be  satisfied.  The 
judgment  shall  be  communicated  by  registered  letter  to  the  party  residing  in 
the  country  where  the  arbitration  has  taken  place,  and  by  cablegram  to  the 
party  residing  in  the  other  country. 

ART.  9.  If  either  of  the  parties  should  fail  to  strictly  fulfill  th§  arbitral  judg- 
ment rendered  by  either  section  of  the  committee,  the  latter  shall,  on  petition 
of  the  other  party,  issue  a  signed  copy  of  the  judgment  in  question ;  and  this 
copy  shall  serve  as  sufficient  basis  for  the  enforcement  of  the  judgment  in  courts 
of  justice  by  the  proper  summary  process  employed  for  the  enforcement  of  the 
final  judgments  of  such  courts. 

ART.  10.  The  party  who  considers  himself  aggrieved  by  a  final  arbitral 
judgment  shall  have  the  right  to  appeal  to  the  Chamber  of  Appeals  in  Com- 
mercial Matters  of  Buenos  Aires,  or  to  the  equivalent  court  of  New  York,  as 
the  case  may  be;  and  such  court  shall  decide  the  appeal  without  further  pro- 
ceeding than  the  presentation  of  the  written  declaration  of  the  appellant  to 
be  made  within  three  days  after  being  requested,  and  the  answer  of  the 
appellee,  to  be  filed  within  the  next  three  days.  This  appeal  may  be  inter- 
posed only  after  the  appellant  has  fully  satisfied  the  arbitral  judgment, 
within  the  period  fixed  therein,  and  provided  the  appeal  is  interposed  before 
the  section  which  rendered  the  judgment  within  three  days  after  the  date 
it  has  been  fully  satisfied. 

ART.  11.  Either  section  may  order  a  merchant  who  has  failed  to  carry  out 
the  arbitral  judgment  or  who  has  failed  to  do  what  has  been  ordered  in  con- 
nection with  an  arbitration  proceeding,  to  be  deprived  of  the  right  to  effect  any 
American  or  Argentine  customs  transaction  during  such  period  as  the  section 
may  establish,  without  prejudice  to  the  execution  of  the  judgment  or  of  the 
order  made.  The  same  penalty  shall  be  incurred  by  any  third  person  who 
shall  permit  his  name  to  be  used  for  effecting  any  customs  transaction  in  the 
interest  of  one  who  is  deprived  of  the  right  of  executing  it  by  judgment  of 
either  section  of  the  committee;  and  the  collectors  of  the  customhouses  shall 
without  further  action  fulfill  the  orders  communicated  to  them  by  either 
section  of  the  committee  according  to  this  provision. 

ART.  12.  In  order  to  be  an  adherent  to  the  International  Committee  of  Com- 
mercial Arbitration  it  is  necessary : 

a)  To  be  a  merchant  domiciled  in  the  United  States  of  America  or  in  the 
Argentine  Republic. 

6)  To  be  presented  as  a  person  enjoying  an  excellent  reputation  by  two  mer- 
chants who  are  adherents  or  in  some  other  form  which  the  section  may  con- 
sider sufficient. 


550  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

c)  To  pay  the  adherence  fee  of  $10  gold  per  annum,  the  amount  of  which 
may  be  increased  or  reduced  by  resolution  of  the  committee. 

ART.  13.  Each  member  of  the  committee  shall  receive  as  compensation  for  his 

services  a  fixed  salary  of  $ per  annum.  Each  section  of  the  committee 

shall  decide  the  number  of  employees  it  requires,  and  shall  fix  the  compensa- 
tion of  each,  as  well  as  the  sum  necessary  to  cover  its  operating  expenses.  The 
respective  general  estimate  shall  be  prepared  by  each  section  annually,  and 
in  order  to  become  effective  shall  require  the  approval  of  the  executive  power 
of  the  respective  country. 

ART.  14.  Whenever  the  amount  of  the  adhesion  fees  is  insufficient  to  meet  the 
expenses  of  the  committee,  the  deficit  shall  be  paid  in  equal  parts  by  the  coun- 
tries interested. 

ART.  15.  The  committee  shall  adopt,  according  to  the  opinion  of  a  majority  of 
its  members,  expressed  by  letter  or  telegraph,  all  measures  of  common  applica- 
tion for  both  sections,  the  purpose  of  which  is  to  assure  a  more  speedy  and 
effective  settlement  of  any  differences  arising  between  merchants  of  the  two 
interested  countries. 

AKT.  16.  The  Government  of  each  interested  country  shall  in  due  time  pre- 
scribe the  regulations  for  the  execution  of  the  law  which  may  be  enacted  to 
carry  into  effect  this  convention  and  will  establish  all  measures  tending  to  the 
obtaining  of  good  results. 


III. 

PROJECT  OF  RESOLUTION  ON  FAST  MAIL  STEAMERS  SERVICE. 

The  Pan  American  Financial  Conference  begs  to.  suggest  the  ad- 
visability of  calling  for  bids  not  later  than  December  31,  1915,  for 
the  establishment  of  a  regular  line  of  fast  mail  steamers  between 
New  York,  Rio  de  Janeiro,  Montevideo,  and  Buenos  Aires,  under  the 
following  conditions: 

Steamers  to  have  at  least  10,000  tons  displacement;  to  make  at 
least  two  trips  per  month;  with  accommodations  for  at  least  150 
first-class  cabin  passengers;  with  refrigerating  arrangements;  and 
to  complete  the  trip  between  New  York  and  Buenos  Aires,  pier  to 
pier,  in  not  more  than  15  days. 

Bidders  to  state  the  compensation  demanded  and  the  period  of 
the  contract. 

As  part  of  the  compensation  for  services  rendered  said  vessels  to 
be  exempt  for  five  years  from  all  fiscal  charges  in  the  respective 
countries  and  to  enjoy  all  facilities  granted  to  any  other  vessels. 

Bids  to  be  acted  upon  within  three  months  and  preference  to  be 
given,  all  other  conditions  being  similar,  to  whoever  will  provide 
for  earlier  inauguration  of  the  service. 

The  Governments  of  the  respective  countries  to  agree  upon  the 
proportionate  charges  to  be  paid  by  each,  and  upon  all  other  details. 


MEMORANDUM  ON  THE  FINANCES  OF  ARGENTINA 
SUBMITTED  BY  DR.  SAMUEL  HALE  PEARSON 


551 


MEMORANDUM  ON  THE  FINANCES  OF  ARGENTINA  SUBMITTED 
BY  DR.  SAMUEL  HALE  PEARSON. 


Having  been  honored  by  my  Government  with  the  appointment 
as  a  delegate  of  the  Argentine  Kepublic  to  the  Pan  American  Finan- 
cial Conference,  I  have  thought  it  might  be.  of  interest  to  all  present 
to  listen  to  a  brief  statement  of  the  finances  of  my  country,  beginning 
from  the  earliest  years  of  its  independence. 

In  order  to  make  clear  the  financial  situation  of  the  Argentine 
Republic,  I  think  it  better  to  begin  with  the  first  operation  of  credit 
of  any  importance  made  by  that  country,  which  was  a  loan  negotiated 
with  Messrs.  Baring  Bros.  &  Co.,  of  London,  in  the  year  1823,  bear- 
ing interest  at  the  rate  of  6  per  cent  and  2J  per  cent  amortization, 
issued  at  90  per  cent. 

Shortly  after  this  operation  was  realized  the  internal  political 
troubles  caused  the  suspension  of  interest  and  it  was  not  until  many 
years  after,  during  the  administration  of  our  first  President,  Gen. 
Mitre,  the  Argentine  Republic  resumed  the  service  on  its  debt,  the 
holders  of  the  bonds  receiving  their  full  capital  and  interest  in  new 
bonds.  During  the  years  1883  to  1885  many  of  the  Argentine  Prov- 
inces issued  loans  with  a  view  of  establishing  national  banks  under 
a  special  national  law.  A  number  of  these  States  negotiated  their 
loans  in  Europe,  principally  with  French  bankers,  but  owing  to  the 
crisis  in  1890  the  Provinces  suspended  service  of  interest  on  these 
loans,  the  country  suffering  at  the  same  time  during  that  year  a  great 
crisis,  and  although  the  National  Government  did  their  utmost  under 
the  Presidency  of  Dr.  Pellegrini,  one  of  our  greatest  statesmen,  to 
continue  the  service  in  cash  they  could  not  do  so.  At  that  time 
our  president,  Dr.  V.  de  la  Plaza,  was  the  financial  advisor  of  the 
Argentine  Republic  in  London,  and  under  his  advice  the  funding 
loan  was  issued  to  pay  service  in  bonds  instead  of  cash  for  five 
years.  Before  the  expiration  of  that  time  the  country  renewed  vol- 
untarily the  normal  service  in  cash  of  its  entire  debt.  Shortly  after 
the  National  Government  decided,  in  the  interest  of  the  credit  of 
the  country,  to  make  arrangements  to  assume  the  loans  created  by 
the  Provinces,  giving  national  bonds  in  exchange  for  the  provincial 
bonds,  and  withdrew  the  loans  issued  by  the  different  Provinces  a 
few  years  previous. 

553 


554  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

The  same  thing  was  done  with  the  railway  guaranties  that  under 
national  laws  were  given  special  guaranties  for  the  construction  and 
equipment  of  their  lines,  but  with  the  financial  crisis  of  1890  these 
guaranties  were  not  punctually  paid,  and  it  was  decided  to  treat  this 
question  in  a  radical  way  by  computing  the  value  of  the  guaranty 
and  give  to  the  railway  4  per  cent  national  bonds.  Fifty  million  dol- 
lars wrere  created  for  this  purpose  and  are  known  as  national  railway 
bonds,  and  thus  completely  reestablishing  the  credit  of  the  Argentine 
Republic,  which  has  been  maintained  during  this  long  period  with- 
out an  interruption,  notwithstanding  the  difficult  moments  experi- 
enced last  year  all  over  the  world  in  consequence  of  the  European 
war  and  thanks  to  the  aBle  way  that  our  President,  Dr.  de  la  Plaza, 
has  controlled  the  finances  of  the  country. 

Nearly  all  of  the  loans  made  by  the  Argentine  Eepublic  were  issued 
under  the  auspices  of  Messrs.  Baring  Bros.  &  Co.,  who  have  been  the 
friends  and  bankers  of  my  country  from  the  beginning,  and  are 
likely  to  resume  the  same  role  as  favorite  bankers  to  Argentina  so 
soon  as  normal  conditions  are  resumed  in  Europe,  as  they  have  the 
sympathy  of  all  the  Argentines.  Many  of  our  principal  loans  were 
issued  solely  for  the  construction  of  railways,  water  and  drainage, 
port  works,  and  other  improvements,  all  of  which  belong  to  the 
National  Government  and  earn  sufficient  to  pay  the  service. 

American  bankers  have  had  little  direct  negotiations  with  our 
country.  Messrs.  J.  S.  Morgan  &  Co.,  of  London,  issued  a  loan 
jointly  with  Messrs.  Baring  Bros.  &  Co.,  in  1886-87,  and  alone  issued 
the  funding  loan  of  1890.  Said  firm  also  had  a  large  interest  in  one 
of  our  great  railway  companies,  the  Argentine  Great  Western  Kail- 
way,  which  company  was  organized  by  them,  and  is  now  known  as 
the  Pacific  Railways. 

The  only  direct  loan  contracted  with  American  bankers  was  one 
for  10  millions  of  dollars  made  by  the  Province  of  Buenos  Aires 
with  Morton,  Bliss  &  Co.  in  1882,  who  took  the  whole  amount 
cash.  This  loan,  according  to  the  statements  of  Don  Pedro  Agote's 
book  on- finance,  was  the  first  Argentine  loan  issued  at  par,  and  was 
brought  out  in  the  London  market.  This  firm,  afterwards  the  Mor- 
ton Trust  Co.,  now  the  Guaranty  Trust  Co.  of  New  York,  I  am 
pleased  to  say  has  continued  its  friendly  relations  and  financial  con- 
nections with  our  country,  and  was  the  only  American  banking  con- 
cern who  transacted  important  business  until  recently.  Since  the 
loan  of  1882,  the  first  financial  operation  of  any  importance  nego- 
tiated with  the  United  States  banks  was  an  advance  for  a  short 
period  of  $15,000,000  made  last  year  by  the  National  City  Bank  of 
New  York  and  its  associates,  and  the  new  issue  made  a  f  ew  days  ago 
by  said  bank  and  its  associates  for  a  further  amount  of  $25,000,000. 


MEMORANDUM   BY   DR.    SAMUEL   HALE   PEARSON.  555 

The  primary  object  was  for  the  purpose  of  retiring  the  first  advance 
of  $15,000,000,  being  part  of  a  loan  of  $50,000,000,  of  which  Messrs. 
Baring  Bros.  &  Co.,  of  London,  issued  the  other  half  in  London. 
With  this  loan  for  five  years,  a  number  of  small  advances  have  been 
retired. 

La  Caja  de  Conversion  was  created  by  national  law  in  the  year 
1896  for  the  purpose  of  controlling  the  emergency  of  the  country,  its 
duties  being  the  exchange  of  used  notes  for  new ;  the  receiving  of  gold 
and  issuing  paper  money  for  its  legal  value,  which  is  44  cents  (gold) 
per  dollar ;  to  receive  back  the  paper,  giving  gold  at  the  same  rate ;  and 
having  the  exclusive  control  of  the  printing  and  issuing  of  the  cur- 
rency of  the  country.  When  the  Caja  de  Conversion  was  created  the 
circulation  of  currency  in  this  country  was  about  300  millions,  but 
to-day  we  have  about  600  millions ;  the  gold  value  is  about  425  mil- 
lions, and  against  this  there  is  in  the  vault  nearly  300  millions,  about 
70  per  cent  of  the  notes  issued. 

BANKS. 

Having  explained  how  our  country  has  negotiated  its  external 
loans,  it  may  be  interesting  for  you  to  know  a  little  of  our  banking 
system. 

In  the  early  years  of  our  independence  a  number  of  banks  were 
established,  but  the  principal  one  was  the  old  Bank  of  the  Province 
of  Buenos  Aires,  founded  in  the  year  1802.  This  bank  was  a  bank 
of  issue,  having  fiscal  privileges,  and  became  a  very  powerful  in- 
stitution, being  the  pioneer  and  founder  of  the  wealth  of  our  coun- 
try; it  used  to  loan  its  money  at  low  interest,  with  a  5  per  cent 
amortization  each  three  months  to  the  farmers  and  owners  of  land, 
enabling  them  to  convert  their  lands  into  our  fine  ranches  of  to-day. 
This  is  how  the  principal  landowners  of  our  country  have  made 
their  fortunes.  This  bank  had  close  relations  with  Messrs.  Baring 
Bros.  &  Co.,  and  became  very  powerful,  having  large  credits  in 
London  and  controlling  the  exchange  market  for  many  years.  The 
financial  and  political  crisis  of  1890  caused  a  suspension  of  this 
powerful  institution,  and  it  was  some  years  before  it  was  reorgan- 
ized with  a  capital  of  $30,000,000,  being  to-day  half  owned  by  the 
Province  of  Buenos  Aires  and  half  by  private  shareholders. 

In  the  year  1873  a  group  of  wealthy  citizens  organized  a  national 
bank,  the  Government  contributing  half  of  the  capital,  and  for  many 
years  this  was  a  powerful  institution,  helping  the  development  of 
all  our  industries  in  the  Republic,  such  as  the  sugar  in  Tucuman,  the 
wine  industry  in  the  Provinces  of  Mendoza  and  San  Juan,  and 
agriculture  in  the  Province  of  Santa  Fe.  This  institution  also  ex- 
perienced the  same  financial  difficulties  as  the  Provincial  Bank  of 
Buenos  Aires,  owing  to  our  crisis  in  the  year  1890,  and  it  was  under 


556  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

Dr.  Pellegrini's  administration  in  the  year  1891  that  the  Banco  de  la 
Nacion  Argentina  was  created,  with  a  capital  of  50  million  dollars 
currency  (this  bank  taking  over  the  liquidation  of  the  Banco  Na- 
cional).  It  is  an  entirely  official  bank,  and  has  in  one  of  the  arti- 
cles of  its  law  of  creation  a  clause  that  all  the  net  profits  are  to  be 
applied  to  the  increase  of  its  capital.  To-day  it  has  reached  the 
sum  of  128  millions  of  dollars,  equivalent  to  over  60  millions  United 
States  gold,  and  has  besides  a  reserve  fund  of  14J  millions  in  gold. 
It  is  managed  entirely  independent  of  the  Government.  The  direc- 
tors are  named  by  the  President  of  the  Republic,  requiring  con- 
firmation by  the  National  Senate.  It  has  over  150  branches  in  the 
Republic,  and  is  constantly  increasing  them,  following  the  growth  of 
the  nation.  It  has  no  agencies  abroad,  although  its  financial  rela- 
tions with  the  principal  banks  and  bankers  of  the  world  are  being 
increased  every  year,  now  having  very  friendly  relations  with  some 
of  the  principal  banks  of  the  United  States.  Its  deposits  have 
reached  over  300  millions  gold,  and  during  the  universal  financial 
difficulties  of  last  year  it  helped  commerce  and  industry  of  the 
Republic,  which  would  have  suffered  greatly  with  the  restriction  of 
European  credits  caused  by  the  war. 

Besides  the  Bank  of  the  Nation  and  the  banks  of  the  Province  of 
Buenos  Aires,  to  which  I  have  referred,  we  have  several  private 
banks  formed  solely  with  Argentine  capital,  which  are  very  pros- 
perous institutions  and  have  been  created  as  the  requirements  of 
the  country  demanded,  such  as  the  Banco  Espaiiol  and  Banco  de 
Italia  del  Rio  de  Plata,  whose  combined  capital  is  over  $80,000,000 
(gold).  Besides  we  have  several  foreign  banks  which  have  taken 
a  very  important  role  in  the  formation  of  the  trade  of  our  country. 
One  of  our  first  foreign  banks  was  the  Bank  of  Maua,  established  in 
Buenos  Aires  and  Montevideo  about  1855,  now  liquidated.  The 
London  and  River  Plate  Bank  was  established  in  the  year  1862  and 
continues  being  the  principal  foreign  bank.  Since  that  date  we 
have  the  London-Brazilian  Bank,  the  British  Bank,  Anglo- South 
American  Bank,  two  German  banks,  and  several  other  banks,  in- 
cluding Italian,  Spanish,  and  Dutch,  with  a  total  capital  of  about 
$300,000,000,  and  the  last  established  being  an  agency  of  the  National 
City  Bank  of  New  York. 

It  may  also  be  interesting  to  make  a  few  remarks  with  regard  to 
the  National  Mortgage  Bank,  which  is  a  Government  institution 
managed  by  a  board  of  directors  named  by  the  President  of  the 
Republic,  with  the  approval  of  the  Senate.  This  institution  issues 
national  cedulas  (mortgage  bonds),  which  are  guaranteed  by  real 
estate  and  can  only  be  granted  by  giving  50  per  cent  of  the  value 
of  the  lands.  Loans  are  limited  to  $250,000  to  any  one  person. 


MEMORANDUM  BY  DR.    SAMUEL  HALE   PEARSON.  557 

These  cedulas  are  valuable  bonds  and  bear  interest  of  5  and  6  per 
cent.  Besides  the  guaranties  above  mentioned,  the  bank  being  a 
national  institution  has  also  the  guaranty  of  the  Argentine  Repub- 
lic.  Some  of  the  first  issues  were  of  7  per  cent,  but  all  have  1  per 
cent  amortization.  They  are  principally  held  in  Belgium,  having 
been  one  of  the  favorite  investments  of  the  Belgian  public.  The 
total  amount  of  cedulas  issued  is  in  the  neighborhood  of  200  millions. 
Several  English,  French,  and  Belgian  mortgage  companies  have 
branches.  These  companies  pay  cash  and  issue  their  own  bonds  in 
their  respective  countries. 

The  following  statistics  may  be  of  additional  interest  to  you.  In 
1913  the  international  commerce  of  the  Argentine  Republic  totaled 
$996,216,000.  Its  population  that  year  was  7,731,257,  and  its  re- 
sources $129  per  capita.  The  imports  of  Argentine  products  into 
England  amounted  to  $173,892,580  (gold)  against  exports  of  that 
country  into  the  Argentine  Republic  of  $117,151,230  (gold).  During 
the  same  year  the  United  States  imported  $26,863,732  (gold)  against 
exports  of  $52,894,834  (gold),  leaving  a  trade  balance  in  favor  of  the 
United  States  of  $26,031,102.  The  principal  imports  of  the  Argentine 
Republic  from  the  United  States  consisted  of  iron,  wood,  oils,  and 
implements.  There  are  163  banks,  with  a  total  capitalization  of 
300  millions  of  dollars,  of  which  one-third  is  the  capital  of  the 
Banco  de  la  Nacion.  Of  these  163  banks,  25  are  foreign.  In  1857 
the  railroad  mileage  was  6  miles,  costing  $285,108;  in  1913  it  was 
20,100  miles,  costing  $1,210,000,000.  The  number  of  passengers 
carried  was  80,000,000,  and  the  amount  of  freight  43,000,000  tons. 
Refrigerating  concerns  in  1885  had  a  capital  of  $6,684,000,  while  in 
1913  this  was  increased  to  $54,000,000.  Argentina  produced  280,000 
tons  of  sugar  in  1913,  of  which  105,000  tons  was  exported.  The  area 
of  land  under  cultivation  is  93,015  square  miles,  and  its  products  are 
as  follows:  Flour,  1J  million  bushels;  wheat,  104  million  bushels; 
oats,  61  million  bushels;  maize,  190  million  bushels;  linseed,  40 
million  bushels. 


MEMORANDUM  SUBMITTED  BY  THE  CHILEAN  DELE- 
GATION ON  QUESTIONS  SUGGESTED  BY  THE 
SECRETARY  OF  THE  TREASURY  FOR 
THE  CONSIDERATION  OF  THE 
GROUP  COMMITTEES 


559 


MEMORANDUM  SUBMITTED  BY  THE  CHILEAN  DELEGATION  ON 
QUESTIONS  SUGGESTED  BY  THE  SECRETARY  OF  THE  TREAS- 
URY FOR  THE  CONSIDERATION  OF  THE  GROUP  COMMITTEES. 


I.  PUBLIC  FINANCE. 

In  addition  to  provision  for  the  ordinary  requirements  of  ad- 
ministration and  defense,  12  per  cent  of  the  entire  budget  is  as- 
signed to  public  instruction  and  considerable  sums  are  annually 
provided  for  the  development  of  a  water  and  drainage  system  in 
the  principal  cities  of  the  Republic  and  for  the  construction  of  port 
works,  which,  when  completed,  will  represent  an  outlay  of  over 
$70,000,000  Chilean  gold,  equivalent  approximately  to  $26,000,000 
United  States  gold. 

The  revenue  and  expenses  of  the  country  have  increased  in  propor- 
tion to  the  general  development  of  commerce,  agriculture,  and  other 
industries,  as  can  be  seen  by  the  following  figures : 


Income  and  expenses  in  1894. 

Pesos  of  18d. 

United  States 
currency.* 

Income 

71,  180.  200 

$25,  945,  000 

Expenses 

56,898,000 

20  739  000 

*Approximately. 

Twenty  years  later,  in  1913,  the  last  normal  year  before  the  war, 
the  fiscal  revenue  of  Chile  amounted  to  $262,270,446.65  paper  money, 
and  $67,8Q6,984.7l  gold  of  18d.  Reducing  at  the  rate  of  lOd.  the 
paper  money,  that  amount  would  mean  $77,575,000  American  gold. 

The  budget  for  1914  amounted  to  $252,626,967  paper  money,  and 
$121,768,583  gold  of  18d.,  equivalent  in  total  to  $95,542,000  American 
gold. 

As  a  consequence  of  the  war  in  Europe,  the  fiscal  budget  for  1915 
has  been  reduced  to  the  following  figures :  $184,091,845.32  paper  cur- 
rency, and  $81,127,639.33  gold  of  18d.,  or  a  total  of  approximately 
$63,362,000  American  gold. 

98257°— 15 36  561 


562 


PAN   AMERICAN   FINANCIAL   CONFERENCE. 


The  following  tables  show  a  classification  of  revenue  and  outlay  in 
1913  and  1914: 

REVENUE  IN  1913. 


Source. 

Paper  money. 

Gold  18d. 

Custom  receipts: 
Imports 

$56  440  899  49 

Exports  — 
Nitrate 

$90  128  620  73 

Iodine 

554  953  50 

Other  items  

4,829  087  90 

'  195  00 

Total  

61,269,987.39 

90,  683,  769.  23 

Posts  and  telegraphs 
rosis  ana  teiegrapns  

6  646  414  37 

392  512  93 

19 

Railroads  

69,  424.  874.  43 

Other  ordinary  receipts        ....                ... 

27  217  036  27 

6  068  958  47 

Extraordinary  receipts: 
Overcharge  in  import  duties 

164,950,825.39 
42  957  995  49 

96,752,727.89 

Guano  

412  724  12 

Total 

207  908  820  88 

97  165  452  oi 

BUDGET  FOR  1914. 


Expenditure. 

Paper  currency. 

Gold  18d. 

Interior  department  (police,  post  and  telegraph  services,  steamship 
services,  nygiene,  hospitals,  and  benevolent  institutions)  

$53  635  441  00 

$549  399  00 

Foreign  affairs  department  (diplomatic  and  consular  services,  coloniza- 
tion offices  subsidy  to  the  church) 

4  722  708  00 

1  510  146  00 

Justice  

10  651  649  00 

Public  instruction        

38  993  906  00 

344  118  00 

Treasury  department  (account  departments,  treasuries,  customhouses, 
internal-revenue  department,  and  foreign  debt) 

18  040  995  00 

60  401  310  00 

War  department  T  .'  T.  '.  

39,  612,  402.  00 

451,  172.  00 

Navy  department 

18  828  026  00 

35  736  518  00 

Industry  and  public  works  department  (technical  schools,  agricultural 
and  industrial  promoting  offices,  public  works)  

25,  367,  552.  00 

221,256.00 

Railways  department  ...T.  '.*  

42  774  288  00 

22  554  664  00 

Total 

252  626  967  00 

121  768  583  00 

The  European  war  has  had  a  serious  but  temporary  effect  upon 
Chilean  revenues.  The  chief  article  of  export — nitrate  of  soda,  vir- 
tually a  Chilean  monopoly — is  employed  chiefly  as  a  fertilizer,  but 
also  used  largely  in  the  manufacture  of  acids  and  explosives.  The 
increased  demands  for  the  latter  purposes  do  not  offset  the  curtailed 
demand  for  agricultural  purposes,  and  exports  have  accordingly 
fallen  off  considerably.  In  normal  times  the  production  exceeds 
5,000,000  Spanish  quintals  per  month,  which  is  more  or  less  the 
quantity  exported,  the  exports  in  1913  having  totaled  2,700,000  tons, 
about  60,000,000  Spanish  quintals,  and  were  on  an  ascending  scale. 
An  export  duty  of  2s.  4d.  per  quintal  is  levied  on  this  commodity, 
which  in  1913  yielded  more  than  £7,000,000  revenue  to  the  Govern- 
ment. As  an  immediate  effect  of  the  war,  the  production  and  export 
fell  off  to  about  2,000,000  quintals  per  month,  but  the  conditions,  how- 
ever, of  production  and  export  are  gradually  improving. 


MEMORANDUM  BY  CHILE.  563 

Customs  duties  are  the  second  largest  source  of  revenue,  and  they 
have  also  been  diminished  by  a  curtailment  of  imports  as  a  result 
of  the  war. 

With  the  utmost  economy  in  public  expenditure  it  is  evident  that 
it  can  not  be  brought  promptly  within  the  revenue  while  this  is  so 
largely  (although  temporarily)  reduced,  and  that  facilities  will  be 
required  to  meet  the  deficiencies.  The  credit  and  borrowing  ca- 
pacity of  Chile,  however,  are  not  affected  by  prevailing  conditions, 
since  the  nitrate  deposits  constitute,  as  has  been  previously  stated,  a 
monopoly  of  that  necessary  commodity,  and  the  Government  ni- 
trate fields,  held  in  reserve,  represent  a  practically  inexhaustible 
supply. 

Apart  from  its  resources  in  nitrate  deposits,  the  Government  owns 
vast  lands  in  Patagonia  and  Tierra  del  Fuego,  which  are  rented 
for  sheep  farming  on  an  extensive  scale.  These  lands,  together  with 
the  trunk  system  of  railroads  owned  by  the  Government,  represent 
in  value  much  more  than  the  foreign  debt. 

As  shown  by  the  budget  for  1915,  the  principal  measure  adopted 
to  meet  the  disturbances  caused  by  the  war  on  the  public  revenue  is 
economy  in  public  expenditures. 

The  Government  has  also  appointed  a  special  commission  to  study, 
in  connection  with  the  interests  represented  by  the  London  nitrate 
committee  and  with  the  nitrate  dealers,  a  plan  of  centralization  of 
sales  to  encourage  the  increase  of  nitrate  consumption  by  keeping 
permanent  stocks  in  the  principal  markets  and  assuring,  as  far  as 
possible,  the  stability  of  prices. 

From  July,  1914,  to  February  28,  1915, 18,405,419  Spanish  quintals 
were  exported,  as  compared  with  42,027,526  from  July,  1913,  to  Feb- 
ruary, 1914,  and  42,263,589  from  July,  1912,  to  February,  1913. 

MINERAL  RESOURCES. 

The  copper  output  of  Chile  is  increasing,  owing  to  the  development 
of  large  copper  properties,  notably  the  Braden  copper  mines  and  the 
prospective  output  of  the  Chuquicamata  mines,  in  both  of  which 
properties  North  American  capital  to  the  extent  of  some  $39,000,000 
is  invested.  The  Bethlehem  Steel  Co.  is  developing  iron  mines  in  the 
Coquimbo  district,  at  an  estimated  outlay  of  $15,000,000  United 
States  gold  or  more. 

Coal  is  found  in  various  sections  of  the  country,  but  the  principal 
mining  center  is  the  coastal  region  south  of  the  River  Bio  Bio,  as 
far  as  the  port  of  Lebu.  Deposits  have  been  found  still  farther 
south,  and  in  Punta  Arenas  a  mine  is  worked  for  the  steamers  and 
local  consumption.  The  coal  fields  of  the  Province  of  Arauco  cover 


564 


PAN  AMERICAN   FINANCIAL  CONFERENCE.' 


618  square  miles,  and  it  is  estimated  that  they  contain  over  1,800,- 
000,000  tons.  The  coal  mining  companies  have  invested  in  this  in- 
dustry over  $7,500,000  United  States  currency  and  now  produce 
over  1,000,000  tons  of  coal  per  year. 

Of  the  coal  and  other  Chilean  industries  the  report  of  Mr.  Otto 
Wilson  contains  valuable  information. 

The  consumption  of  nitrate  of  soda  in  the  United  States  is  show- 
ing more  gratifying  progress  than  in  any  other  country.  In  1905 
the  United  States  consumed  272,500  tons  of  nitrate,  at  a  value  of 
$9,306,577  United  States  gold,  increasing  as  follows : 


Year. 

Tons. 

Value. 

Year. 

Tons. 

Value. 

1°06 

373  942 

$13,115,725 

1911... 

528,435 

$16  244  812 

1907 

332  679 

13  595  458 

1912 

475  560 

15  123  210 

1908 

323,543 

12,277,964 

1913  

573,  773 

19,  942.  419 

1909 

329  124 

11,296,083 

1914  

561,209 

17,  808,  763 

1910 

538,  119 

16,225,296 

The  immediate  effect  at  the  outbreak  of  the  European  war  was  to 
curtail  the  export  not  only  of  nitrate  of  soda  but  of  copper  and  other 
products  of  Chile.  It  also  resulted  for  a  time  in  the  refusal  to  accept 
and  pay  bills  of  exchange  in  London  drawn  against  shipments  of 
nitrate  of  soda,  and  the  reflex  effect  of  this  situation,  leading  to  a 
moratorium  in  London,  upon  financial  conditions  in  Chile,  prompted 
the  Government  to  declare  a  60- day  moratorium  there. 

II.    MONETARY   SITUATION. 

The  monetary  system  of  Chile  is  founded  upon  a  law  of  1895 
fixing  the  basis  of  the  peso  as  18d.  sterling.  In  1898  the  issue  of 
paper  money  was  authorized,  the  amount  in  circulation  at  present 
being  $150,000,000,  for  the  redemption  of  which  the  Government  has 
a  deposit  at  its  credit  in  European  banks  which  amounted  on  Decem- 
ber 31,  1913,  to  105,949,222.83  Chilean  gold  pesos  of  18d.,  or  ap- 
proximately £7,950,000,  and  which  has  since  be^n  increased  by  the 
accrued  interest.  In  obedience  to  a  demand  for  elasticity  in  the  cir- 
culating medium,  a  law  of  May,  1912,  created  the  Caja  de  Emision,  a 
special  organization  for  the  issue  of  paper  currency  to  be  delivered 
to  the  banks  against  a  deposit  in  cash  of  12d.  sterling  per  peso.  By 
this  means  the  banks  are  able  to  obtain  currency  to  meet  the  require- 
ments of  commerce,  and  many  difficulties  have  been  overcome,  includ- 
ing those  incident  to  the  outbreak  of  the  war,  which  caused  at  first  a 
heavy  claim  upon  this  facility.  Now  things  have  been  brought  back 
to  normal  conditions. 

Prior  to  the  war  both  branches  of  congress  had  agreed  upon  a 
project  to  give  stability  to  the  value  of  the  paper  currency,  adapting 


MEMORANDUM  BY  CHILE. 


565 


to  the  conditions  of  Chile  the  system  known  by  the  name  of  gold- 
exchange  standard,  and  taking  as  a  basis  the  average  value  of  the 
peso  over  a  series  of  preceding  years,  viz,  lOd.  per  peso.  To  provide 
for  emergency  necessities,  a  central  financial  institution  was  de- 
signed, which  would  also  regulate  relations  between  the  Government 
and  the  banks,  as  well  as  between  the  banks  themselves.  The  dic- 
tates of  prudence,  under  the  conditions  brought  about  by  the  war, 
forbade  the  adoption  of  this  new  system  at  that  time.  Had  it  been 
adopted,  however,  it  is  evident  that,  after  providing  for  the  redemp- 
tion of  the  entire  circulation  of  paper,  it  would  have  left  a  consider- 
able surplus  to  the  Government. 

Notwithstanding  the  recommendation  of  the  first  Pan  American 
Congress  in  favor  of  a  uniform  international  monetary  system,  the 
Chilean  delegation  regards  it  as  extremely  difficult  to  adopt  a  uni- 
form basis  of  value  in  view  of  existing  conditions  and  of  the  diverse 
basis  already  adopted  by  many  of  the  South  American  countries,  for 
the  most  part  with  relation  to  the  pound  sterling.  It  would  be  neces- 
sary to  readjust  the  entire  system  of  finance,  both  internal  and 
external. 

HI.   THE  PRESENT  BANKING  SITUATION. 

The  war  in  Europe  has  had  no  effect  upon  the  stability  of  the 
banking  system  in  Chile.  The  banking  law  of  1860  remains  in  effect, 
except  as  to  the  power  it  gave  banks  to  issue  notes,  and  which  was 
canceled  many  years  ago.  Foreign  banks  duly  incorporated  may 
open  branches  in  Chile.  There  is,  however,  at  present  a  project 
of  law  requiring  them  to  invest  or  maintain  in  Chile  the  capital 
they  declare  for  use  in  the  country,  and  limiting  the  deposits  they 
may  receive  in  proportion  to  such  capital.  At  present  there  are 
22  Chilean  deposit  and  discount  banks,  with  about  200  branches 
distributed  through  the  country.  There  are  also  6  foreign  banks 
doing  business  in  Chile,  each  having  many  branches. 

The  following  table  shows  the  financial  movement  for  the  year 
ending  December  31,  1913 : 

CHILEAN  BANKS. 


Statement. 

Paper  money. 

Gold,  18d. 

Deposits 

$316.055.823.55 

$33,041.352.93 

Capital 

142  271  047  00 

502  000.00 

Profit  and  loss      .        ..                  

10,  587,  134.  61 

50,063.57 

Cash 

51,595.617.35 

6,  759,  589.  59 

Discounts  loans  and  advances 

453,318,217.84 

25,  494,  440.  42 

566 


PAN  AMERICAN  FINANCIAL  CONFERENCE. 
FOREIGN  BANKS. 


Statement. 

Paper  money. 

Gold,  18d. 

Deposits 

$94.604.919  33 

$28  060  408  87 

Capital 

16  639  207  92 

8  267  973  85 

Profit  and  loss 

Cash  

14.  853.  229.  42 

2  004  020  93 

Discounts,  loans,  and  advances 

137,797  622.09 

31  220  208  17 

For  the  year  ending  December  31,  1914 

CHILEAN  BANKS. 


Statement. 

Paper  money. 

Gold,  18d. 

Deposits  

$313,  138,  171.  18 

$40  341  725  44 

Capital          .... 

188  477  340  33 

2  121  035  99 

Profit  and  loss 

9  337  406  61 

44  992  33 

Cash  ... 

76.831.730  05 

5.997.985!  45 

Discounts,  loans,  and  advancos 

418,613  893.94 

16  715  243  01 

FOREIGN  BANKS. 


Statement. 

Paper  currency. 

Gold,  18d. 

Deposits 

$78  415  724  82 

$28  327  621  54 

Capital  

27  632,312.91 

3,267,973.85 

Profit  and  loss 

Cash  

30.011,968.69 

2.  222,  068.  00 

"Discounts,  loans,  and  advances 

93,898,825.28 

32,519,997.35 

The  foregoing  comparison  of  1914  with  1913  shows  that  the 
European  war  caused  no  impairment  to  the  integrity  of  the  banking 
situation,  notwithstanding  the  fact  that  the  foreign  banks  were  con- 
strained to  remit  to  their  home  establishments  the  greater  part  of 
the  funds  that  they  had  in  the  country. 

The  Caja  de  Credito  Hipotecario  is  an  official  institution,  organized 
under  a  law  of  1857,  primarily  to  assist  agriculture  by  making  loans 
on  real  estate  for  long  terms.  The  same  law  authorized  the  forma- 
tion of  private  institutions  of  similar  character,  fixing  regulations 
for  their  loans.  The  operations  for  these  institutions  up  to  the  end 
of  the  year  1913  is  set  forth  in  the  following  table : 

Bonds  issued. 


Name  of  institution. 

Chilean 
paper 
currency. 

Francs. 

Pounds 
sterling. 

Caja  Hipotecaria 

253  098  100 

107  038  500 

626  790 

Banco  Hipotecario  de  Chile 

110  076  500 

Banco  Garantizador  de  Valor«s  

44.841,500 

Banco  Hipotecario  de  Valparaiso  

11,833,000 



, 

MEMORANDUM   BY  CHILE. 


567 


Savings  banks  in  Chile  are  of  relatively  modern  origin,  but  shows 
substantial  development.  Twenty  years  ago  the  total  deposits  were 
$4,654,216,  while  in  1914  they  exceed  $100,000,000.  The  statement 
as  of  December  31,  1913,  is  as  follows : 

Amounts  deposited. 


Name  of  institution. 

Depositors. 

Paper 
currency. 

Mortgage 
bonds. 

Totals. 

Caja  de  Ahorros  de  Santiago                   

153,066 

$25,  929,  814 

$3,497,577 

529,427,391 

Caja  Nacional  de  Ahorros,  which  has  115  branches 

359  6*>2 

57  032  670 

3  020,613 

60,053,283 

Caja  de  Ahorros  de  Empieados  Publicos  (civil 

7,650 

5,  331,  056 

5,331,056 

Sooiedad  Proteccio'n  Mutua  de  Empieados  Pu- 
blicos 

3,540 

2,  586,  058 

2,586,058 

Caja  de  Ahorros  de  los  Ferrocarriles  del  Estado 
(State  Railways)  

4,359 

2,034,150 

2,  034,  150 

528,237 

$92,913,748 

$6,518,190 

$99,413,938 

Should  such  restrictions  upon  the  operation  of  foreign  banks  in 
Chile  as  are  contemplated  in  the  project  of  law  referred  to  become 
effective,  it  will  not  affect  the  volume  pf  business  between  Chile  and 
the  United  States,  as  it  is  expected  that  the  Chilean  financial  institu- 
tions will  come  into  closer  contact  with  financial  institutions  in  the 
United  States  and  cooperate  to  mutual  advantage. 

IV.    THE  FINANCING  OF  PUBLIC  IMPROVEMENTS. 

The  national  public  debt  of  Chile  consists  of  nine  loans  of  4|  per 
cent  interest,  originally  amounting  to  £16,395,500 ;  of  seven  loans  at 
5  per  cent,  the  primitive  value  of  which  was  £22,655,000 ;  of  one  loan 
of  5J  per  cent,  originally  of  £200,000;  and  of  one  6  per  cent,  orig- 
inally of  £149,000. 

Total,  18  loans,  the  aggregate  of  which  is  £39,399,500,  reduced  now 
through  annual  sinking  funds  to  a  little  over  £33,000,000.  The  exact 
figure  of  December  31,  1913,  was  £33,912,340. 

Of  these  loans,  two  were  floated  in  Germany,  one  in  Paris,  one  in 
Chile,  and  the  rest  in  London.  The  highest  price  of  issue  was  lOlf 
for  the  4J  per  cent  loan  of  1889,  and  the  lowest  89,  for  the  4J  per  cent 
loan  of  1885. 

Here  is  a  summary  of  the  external  debt  of  Chile,  which  is  repro- 
duced from  the  South  American  Hand  Book,  recently  published  by 
the  National  Foreign  Trade  Council,  after  correcting  small  errors 
and  omitting  the  two  last  items  which,  although  referring  to  bonds 
issued  under  guaranties  from  the  Government,  do  not  belong  to  the 
national  debt  but  to  private  companies : 


568 


PAN   AMERICAN   FINANCIAL   CONFERENCE. 


Summary  of  debt  of  Chile. 
Government  debt  (external). 


Year. 

Rate  of 
interest. 

Sinking 
fund. 

Name  of  loan. 

Original 
amount. 

Amount  out- 
standing. 

Issue 
price. 

1885 
1886 
1887 
1889 
1892 
1892 
1893 
1895 
1896 

1896 
1900 

1905 
1906 
1909 
1910 
1911 
1911 
1911 

1 

Per  cent. 
4* 

4$ 
g 

45 

5 
6 

4} 

£ 

5 

8 

5 
4i 

5 
5 
5 
5 
45 

'otal  exten 

Per  cent. 
ft 

i 
I 

i 
i 
i 
i 
i 
i 

2 

1 

1 
2 
} 

1 
1 
1 

15 

lal  debt  of 

Chilean  Government  45  per  cent 
loans  of  1885 

£808,900 
6,010,000 
1,160,200 
1,546,400 
1,800,000 
149,000 
630,000 
2,000,000 

4,000,000 
200,000 

265,000 

• 

1,350,000 
3,700,000 
3,000,000 
2,600,000 
4,905,000 
5,000,000 
275,000 

£531,100 
4,206,700 
817,500 
1,223,640 
1,447,300 
90,520 
495,700 
1,661,300 

3,436,700 
74,400 

222,  160 
1,256,700 
2,981,220 
2,934,700 
2,517,040 
4,802,180 
4,948,200 
265,280 

89 
985 
97J 
lOlf 
95 

Chilean  Government  45  per  cent 
loans  of  1886 

Chilean  Government  45  per  cent 
Ioansofl887  

Chilean  Government  45  per  cent 
gold  loan  of  1889 

Chilean  Government  5  per  cent 
loan  of  1892 

Chilean  Government  6  per  cent 
international  loan  of  1892 

Chilean  Government  4i  per  cent 
bondsof!893  

Chilean  Government  45  per  cent 
loans  of  1895 

935 
95J 

955 
945 
965 
99 
985 
985 

Chilean  Government  45  per  cent 
loans  of  1896 

Penuelas  loan  

Chilean  Government  4|  per  cent 
Coquimbo  Railway  bonds  
Chilean  Government  5  per  cent 
loan  of  1915 

Chilean  Government  45  per  cent 
gold  loan  of  1916  

Chilean  Goveratnent  5  per  cent 
Ioanofl909  

Chilean  Government  5  per  cent 
loan  of  1910  

Chilean  Government  5  per  cent 
loan  of  1911,  first  series 

Chilean  Government  5  per  cent 
loan  of  1911,  second  series 

Chilean  Government  4J  per  cent 
bonds  (Copiapo  Railway  bonds).  . 

Chilean  Government 

£39,399,500 

£33,912,340 



There  have  also  been  placed  in  London  £2,000,000  in  treasury 
notes. 

Besides,  the  Government  of  Chile  has  guaranteed  a  private  loan 
of  the  Iron  Smelting  Co.,  of  Corral,  for  £525,000 ;  the  bonds  issued  by 
the  Transandine  Railway  Co.,  aggregating  a  sum  of  £1,450,000;  and 
also,  the  bonds  issued  by  the  Longitudinal  Railroad  contracting  com- 
panies, the  approximate  value  of  which  is  £7,000,000.  The  bonds  for 
£2,218,413,  which  appear  in  the  last  two  items  of  the  table  of  the 
National  Foreign  Trade  Council,  are  part  of  this  last  amount. 

In  Chile  the  street  tramways  and  the  electric  and  gas  lighting 
systems  are  private  enterprises.  The  railroad  system  of  the  country, 
except  the  nitrate  railways,  the  Antof agasta  Railway,  which  traverses 
Chile  en  route  to  Bolivia,  the  railway  belonging  to  the  Arauco  Co., 
and  some  few  small  railways  serving  private  interests,  is,  as  already 
stated,  Government  property.  The  Chilean  Steamship  Co.,  which 
operates  a  line  of  Chilean  steamers  along  the  Pacific  coast  up  to 
Panama,  with  little  or  no  aid,  at  present,  from  the  Government,  is 
a  private  enterprise. 


MEMORANDUM   BY   CHILE. 


569 


The  waterworks  at  each  locality,  although  often  constructed  by 
the  Government,  is  the  property  of  the  municipality  it  serves,  so 
that  the  Government  has  no  concern  with  the  financing  of  public 
utilities  except  when  it  guarantees  the  obligations  of  a  Province  or  a 
municipality.  At  the  present  time  the  Valparaiso  waterworks 
is  seeking  a  loan  of  £100,000.  Three  years  ago  a  £250,000  loan  was 
issued  in  London  on  exceptionally  favorable  terms.  This  loan  offers 
a  special  pledge  of  the  water  revenues  and  is  guaranteed  by  the  Gov- 
ernment, but  so  far  no  interest  has  been  manifested  in  the  United 
States  in  the  business. 

Chile  is  not  a  federal  country,  and  consequently  there  are  no 
State  or  Province  debts.  Notwithstanding  this,  from  time  to  time, 
municipal  bodies  are  authorized  by  law  to  float  loans  for  the  purpose 
of  building  public  works.  The  amount  of  the  outstanding  municipal 
loans  is  as  follows : 

Municipal  loans  (external). 


Year. 

Rate  of 
interest. 

Sinking 
fund. 

Name  of  loan. 

Original 
amount. 

Amount 
outstand- 
ing. 

Issue 
price. 

1894.... 
1912.  .  .  . 

1913.... 
1912.  .  .  . 

1913.... 

T< 

Per  cent. 
5 

H 
* 

)tal  extern 

Per  cent. 
2 

City  of  Valparaiso  5}  per  cent  loan  
City  of  Valparaiso  5  j'per  cent  water-board 
loan. 
City  of  Vina  del  Mar  5  per  cent  bonds  
City  of  Concepci<5n  5J  per  cent  sterling 
loan  of  1912. 
City  of  Concepci<5n  54  per  cent  sterling 
loan  of  1913. 

nunicipalities  

£200,000 

250,000 
200,000 

100,000 
50,000 

£74,400 

244,200 
198,440 

99,000 
50,000 

94 

99 
95i 

100 
100 

"~2 

2 

il  debt  01  1 

£800,000 

£666,040 

The  internal  debt  of  Chile  is  given  below : 

Treaty  of  peace  with  Bolivia  (of  18  d.) — —  $5,  822, 535.  00 

Paper  money  issued  by  the  Government 150, 000, 000.  00 

Municipal  debts  taken  by  the  Government 9,  232. 28 

Censos  redimidos  (permanent  debt) 30,450,431.46 

3  per  cent  internal  loan  of  1837 1,594,772.06 

Outstanding  notes  of  paper  money  previously  issued 863,  803.  50 

Treasury   notes 2,  600.  00 


$188,  743,  374.  30 

The  principal  item  of  the  internal  debt  is  the  paper  money  issued 
by  the  Government,  which  is  guaranteed,  as  already  said,  by  the  con- 
version fund  accumulated  in  Europe. 

The  funds  proceeding  from  external  loans  have  been  principally 
devoted  in  Chile  to  railroad  construction  and  public  works.  The 
railroads  in  Chile  belonging  to  the  State  represent  5,207  kilometers. 
They  are  worth  over  £30,000,000. 


570  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

The  operating  of  the  State  railways  was  a  source  of  losses  for  the 
Government  during  some  years,  but  the  new  organization  given  to 
them  as  an  industrial  enterprise  and  the  revised  tariffs,  which  are 
in  force  since  the  middle  of  last  year,  have  modified  very  favorably 
the  situation,  and  now  the  Government  not  only  does  not  incur  a 
deficit,  as  before,  but  derives  from  the  railways  an  income  which  is 
rapidly  increasing. 

At  present  there  are  under  construction  in  Chile  21  railroad  lines 
or  sections  thereof,  with  a  total  length  of  2,301  kilometers. 

In  Chile  the  Government  builds  also  bridges  and  roads,  irrigation 
works,  water-supply  works,  port  and  fluvial  works,  drainage  and 
harbor  works.  The  works  of  the  port  of  Valparaiso,  undertaken  by 
the  English  firm  of  Pearson  &  Sons,  represent  a  total  value  of 
£2,500,000. 

In  the  port  of  San  Antonio  works  are  now  being  completed,  the 
value  of  which  is  £750,000. 

In  Talcahuano  there  is  work  done  in  the  military  port,  worth 
£2,000,000,  and  a  dry  dock,  large  enough  for  the  greatest  ships  afloat, 
is  now  being  constructed  there. 

Besides  the  value  of  its  railroads,  the  State  owns  in  Chile  the 
extensive  land  situated  around  the  Straits  of  Magellan  that  are 
rented  for  sheep-breeding  purposes.  In  the  north  the  State  owns  the 
nitrate  fields  of  indeterminate  but  very  considerable  value.  In  the 
balance  sheet  of  the  public  treasury  the  unestimated  State  properties 
figure  for  £45,000,000. 

There  is  no  relation  between  the  decline  of  public  revenue  and  the 
service  of  its  foreign  debt  by  Chile.  Default  in  such  service  has 
never  occurred  in  time  of  peace  or  in  time  of  war  or  even  during 
the  civil  war  of  1891. 

The  service  of  the  external  public  debt  of  the  country  originates 
an  annual  expenditure  of  £2,218,755.  The  fiscal  revenue  in  gold  in 
1913— last  normal  year— amounted  to  $67,806,984.71,  after  deducting 
the  gold  that  was  sold  and  converted  into  currency  to  defray  expendi- 
tures in  Chile.  This  amount  is  equal  to  £5,085,523.  Consequently, 
with  less  than  half  the  gold  revenues,  the  service  of  the  public  debt 
is  attended  to,  and  there  remains  free,  for  the  ordinary  necessities 
of  the  administration,  the  remaining  portion  of  the  gold  receipts  and 
all  the  revenues  collected  in  paper  currency,  which  in  1913  amounted 
to  $262,270,446.65. 

There  are  definite  projects  for  the  construction  of  the  ports  of 
Arica  and  Antofagasta,  both  of  great  importance,  because  they  are 
auxiliaries  of  the  Bolivian  trade,  a  country  to  which  they  are  con- 
nected by  railroad  lines. 


MEMORANDUM   BY   CHILE.  571 

If  American  capital  should  interest  itself  in  those  works  it  would 
be  possible  to  adopt  either  one  of  these  two  systems : 

(a)  Payment  of  the  work  in  Chilean  Government  bonds;  or 

(b)  Exploitation   by    the    constructing   company    of   the   works 
during  a  certain  number  of  years. 

V.    THE   FINANCING  OF  PRIVATE   ENTERPRISES. 

As  has  already  been  said,  the  greater  part  of  the  Chilian  railroads 
belong  to  the  State.  Those  belonging  to  private  enterprises  are  alto- 
gether of  2,872  kilometers  in  length,  not  including  the  electric  lines 
Jbetween  Santiago  and  San  Bernardo  and  between  Concepcion  and 
Talcahuano.  It  is  advisable  to  mention  that  the  Chilean  Govern- 
ment has  seriously  devoted  its  attention  to  the  electrification  of  the 
different  sections  of  the  railroads,  where  the  traction  used  has  been 
up  to  the  present  that  of  steam  locomotives.  To  that  effect  it  was 
resolved  to  invite  the  American  and  European  capitalists  to  interest 
themselves  in  those  affairs  and  to  send  in  their  respective  tenders, 
but  that  plan  has  been  temporarily  postponed  by  reason  of  the  war. 

The  street  cars  belong  entirely  to  private  enterprises  and  have  cost 
$56,000,000  of  18d. 

The  telegraph,  with  a  total  length  of  approximately  25,000  kilo- 
meters, belong  almost  entirely  to  the  State. 

The  telephones,  on  the  contrary,  belong  to  private  enterprises  and 
have  been  installed  at  a  cost  of  about  $12,000,000  Chilean  currency. 
They  have  60,000  kilometers  of  telephonic  lines. 

Also  of  private  individuals  or  corporations  are  the  gas  companies, 
those  of  electric  lighting  and  the  power  plants,  that  by  reason  of  the 
natural  conditions  of  the  country  are  able  to  produce  a  practically 
unlimited  amount  of  power. 

The  extension  of  agricultural  lands  actually  in  operation  in  Chile 
is  of  280,000  square  kilometers,  in  which  there  are  1,000,000  hectares, 
flat  and  irrigated;  4,000,000  hectares  are  susceptible  of  irrigation, 
constituting  a  very  propitious  ground  for  productive  investment  of 
American  capital.  There  are  also  16,000,000  hectares,  more  or  less, 
of  natural  forests,  and  5,000,000  of  natural  prairies  in  Magellan. 
The  forests  of  Chile  are  not  only  valuable  on  account  of  the  excel- 
lent and  various  woods  available,  but  also  because  they  can  furnish 
very  considerable  amounts  of  good  pulp  used  in  the  paper  manu- 
facturing industries. 

The  financial  help  necessary  for  agricultural  exploitation  is 
principally  obtained  from  the  local  credit  and  discount  banks,  from 
the  mortgage  institutions,  and  from  the  advancements  that  the  ex- 
porting houses — English  and  German  in  the  greater  part  and  some- 
times American — make  against  harvests. 


572  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

The  principal  agricultural  products  in  Chile  are,  so  far,  wheat, 
barley,  oats,  beans,  potatoes,  and  grapes  that  give  wines  of  excellent 
quality.  The  cattle  industry  furnishes  beef  sufficient  for  the 
domestic  consumption,  and  no  less  than  5,000,000  sheep  permit  us 
to  export  wool  and  refrigerated  meats.  The  industry  of  preserving 
vegetables  and  fruits  has  been  very  successfully  initiated  and  has 
obtained  a  very  powerful  development;  and  the  opening  of  the 
Panama  Canal  will  doubtlessly  allow  a  considerable  increase  in 
the  trade  of  fresh  vegetables  and  fruits,  if,  as  we  expect,  there  are 
transportation  facilities  established  between  the  United  States  and 
South  America,  as  this  trade  will  be  favored  by  the  circumstance 
of  winter  of  the  Northern  Hemisphere  corresponding  to  the  summer 
in  the  southern  and  vice  versa,  thus  enabling  the  American  markets 
to  be  supplied  during  the  season  in  which  they  lack  of  those 
commodities. 

There  is  in  Chile  no  law  of  warrants,  and  it  would  be  convenient 
to  recommend  it  as  a  means  of  cooperating  to  the  industrial  and 
agricultural  development  and  to  furnish  convenient  collateral  as 
security  for  commodity  loans. 

It  can  not  possibly  be  the  object  of  this  brief  sketch  to  indicate 
the  reforms  that  could  be  introduced  in  order  to  assure  the  greater 
uniformity  in  laws  relating  to  commerce,  or  to  procure  the  uni- 
formity of  the  customhouse  classification,  or  to  protect  trade-marks ; 
but,  as  this  delegation  acknowledges  the  great  importance  of  any 
measure  directed  to  this  object,  it  wishes  to  recommend  the  appoint- 
ment of  a  permanent  international  commission  to  which  this  complex 
labor  could  be  assigned. 

VI.  THE  EXTENSION  OF  INTERAMERICAN  MARKETS. 

Chilean  merchants  are  accustomed  to  long  terms  of  credit  accorded 
by  European  interests.  Six  months'  credit  is  freely  extended 
by  European  houses  located  in  Chile.  Formerly  North  American 
houses  conducted  their  business  on  the  basis  of  30  days'  credit,  but 
latterly  have  extended  the  term  of  credit  to  90  days,  or  3  months. 
It  appears  that  the  banking  systems  of  Europe  favor  the  liberal 
terms  by  facilitating  their  foreign  houses,  whereas  banking  in  the 
United  States  has  not  taken  cognizance  of  this  requirement  of  for- 
eign trade  nor  steps  to  facilitate  its  export  commerce.  It  is  under- 
stood, however,  that  this  subject  is  now  engaging  the  attention  of 
the  bankers  in  the  United  States. 

Efforts  are  also  being  made,  and  will  receive  all  possible  assistance 
from  the  Chilean  authorities  and  banks,  to  establish  a  market  for 
dollar  exchange  in  Chile.  To  accomplish  this  purpose,  however,  a 


MEMORANDUM   BY  CHILE. 


573 


constant  demand  for  a  supply  of  dollar  drafts,  just  as  there  is  and 
always  has  been  a  constant  supply  and  demand  for  sterling  drafts 
at  fluctuating  rates  of  exchange,  will  be  necessary.  There  may  be  a 
large  supply  of  dollar  drafts  offering  at  one  time,  but  if  it  does  not 
coincide  with  the  demand  for  such  drafts  their  value  is  a  matter  of 
computation,  taking  sterling  as  a  basis. 

The  war  in  Europe  necessarily  curtails  the  facilities  which  Central 
and  South  American  countries  are  accustomed  to  seek  in  European 
financial  centers.  This  affords  an  unusual  opportunity  for  the  United 
States  to  substitute  facilities,  and  should  the  trend  of  finance  be 
diverted  from  London  to  New  York  in  an  appreciable  degree  dollar 
exchange  will  measurably  replace  sterling  exchange. 

The  following  table,  reproduced  from  a  handbook  just  published 
by  the  Pan  American  Union,  shows  the  articles  which  constitute  the 
imports  of  Chile. 

The  imports,  in  Chilean  currency,  by  major  groups  of  articles  for 
the  years  1909, 1910,  1911,  1912,  and  1913  were  as  follows: 

Principal  imports. 


Merchandise. 

1909 

1910 

1911 

1912 

1913 

Textiles                

$23,101,983 

$29,117,833 

$28  711  215 

$29  935  942 

$28  047  666 

Mineral  products      

16,844,208 

18,825,139 

25,026,353 

21,794,433 

22  275,078 

Coal  and*^  oils                   

16,570,731 

18,778,313 

18,994  043 

17  998  738 

19  825  175 

Machinery  hardware  carriages  etc 

10,  308,  871 

9  512  876 

15  523  277 

16  156  432 

14  961  485 

Vegetable  products  .'.  '.  

10,509,425 

11,854,304 

13,130,294 

13  225,745 

13  933  916 

Animal  products 

10,  065,  369 

9  142  415 

12  540  880 

9  056  776 

7  848  276 

2  535,937 

3  360  852 

4  053  092 

3  425  025 

3  581  '029 

Wines',  liquors,  and  other  beverages  
Chemical  and  pharmaceutical  products, 
and  toilet  articles       

1,931,337 
2,020,430 

2,  583,'  964 
2,335,554 

2'  672)  152 
2,735,636 

3)179)733 
2,942,523 

2)l93)936 
2,041  045 

Arms  amnTUTiitinTi  and  6^plosiv«s 

828,  929 

1,598,488 

1  472  222 

1  104  557 

1  410  818 

Miscellaneous  

842,988 

1,472,541 

2,522,315 

3,256,090 

3  155  576 

Total 

95  660  208 

108  582  279 

127  381  479 

122  075  994 

120  274  000 

The  Chile  gold  peso  is  taken  as  equal  to  $0.365  United  States  gold.  The  United  States  gold  dollar  is 
taken  as  equal  to  2.740  pesos  gold.  These  figures  are  partly  from  the  President's  message,  partly  from 
advance  consular  reports.  They  may  be  slightly  modified  later. 

The  imports,  in  United  States  gold,  for  the  years  1909,  1910,  1911, 
1912,  and  1913,  by  principal  countries  of  origin,  were  as  follows : 


Countries. 

1909 

1910 

1911 

1912 

1913 

United  Kingdom 

$31  879  259 

$34  340  573 

$40  805  052 

$38  616  886 

$36  028  311 

Germany  

22,  646,  662 

26,  296,  071 

32,696,171 

33  189*070 

29  579  180 

United  States          

9  636  402 

13  369  774 

15  775  969 

16  806  341 

20  090  266 

France 

5  661  502 

7  010  929 

6  931  714 

7  261  061 

6  623*252 

• 

The  Chilean  delegation  will  call  attention  to  the  necessity  of  ex- 
tending and  broadening  the  facilities  that  banks  in  the  United  States 
now  afford,  for  acceptances,  discounts,  and  rediscounts,  and  will  move 
also  that  bonded  warehouse  warrants  and  receipts  be  adopted  as  a 


574  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

means  of  providing  collateral  securities  for  the  development  of  in- 
ternational commerce. 

The  custom  tariff  of  Chile  enforced  by  law  No.  980,  of  23d  of  De- 
cember 1897,  is  based  upon  a  general  ad  valorem  duty  of  25  per  cent 
and  in  two  exceptional  higher  rates  of  60  and  35  per  cent,  and  two 
lower  rates  of  15  and  5  per  cent.  There  are  also  some  goods  on  which 
a  specific  duty  is  levied,  and  others  free  of  duty. 

The  protective  duty  of  60  per  cent  applies  to  some  commodities, 
the  manufacture  of  which  the  law  intends  to  promote  in  Chile,  and 
that  of  35  per  cent  to  other  similar  articles  and  to  luxuries,  or  mer- 
chandise that  can  not  be  considered  a  necessary  of  life. 

The  lower  rates  of  15  per  cent  and  5  per  cent  are  chiefly  applied  to 
goods  required  for  the  industrial  development  of  the  country,  motor 
cars  being  included  under  the  15  per  cent  tax. 

Such  articles  as  tobacco,  wines,  sugar,  salt,  etc.,  are  subject  to 
specific  tax,  and  finally  a  great  number  of  commodities,  such  as  coal, 
agricultural  and  industrial  machinery,  printing  paper,  and  others, 
not  less  than  118  in  number,  were  absolutely  free  of  all  duty  until 
recently.  Law  No.  2641,  dated  February  12,  1912,  was  passed  reduc- 
ing the  number  of  articles  exempt  from  duty  for  a  limited  period 
and  placed  a  tax  of  5  per  cent  on  them.  An  additional  5  per  cent 
is  also  imposed  on  all  goods  according  to  previous  classification. 

VII.    MERCHANT  MARINE  AND  IMPROVED  TRANSPORTATION  FACILITIES. 

The  above  subject  has  been  referred  to  a  special  committee,  and 
we  will  therefore  not  go  into  the  matter  here. 

(Signed)  Luis  IZQUIERDO. 

AUGUSTO  YlLLANUEVA. 
GONZALO  VERGARA  BULNES. 


MEMORANDUM  SUBMITTED  BY  THE  DELEGATION 
OF  THE  REPUBLIC  OF  ECUADOR 


575 


MEMORANDUM  SUBMITTED  BY  THE  DELEGATION  OF  ECUADOR 
TO  THE  HONORABLE  SECRETARY  OF  THE  TREASURY  OF  THE 
UNITED  STATES  ON  THE  SUBJECTS  WHICH  IN  THEIR  JUDG- 
MENT MIGHT  BE  DESIRABLE  TO  DISCUSS  AT  THE  SESSIONS  OF 
THE  PAN  AMERICAN  FINANCIAL  CONFERENCE. 


I.  BANKING  AND  CURRENCY. 

(1)  Desirability  of  passing  adequate  legislation  for  the  establish- 
ment and  operation  of  branches  and  agencies  of  American  banks  in 
Latin  America,  and  of  Latin- American  banks  in  the  United  States. 

(2)  Adoption  of  the  gold  standard  in  all  the  countries  of  the 
Pan  American  Union.    Convenience  of  constituting  a  Pan  American 
Monetary  Union. 

II.  SECURITIES. 

(3)  Desirability  of  passing  adequate  legislation  regarding  securi- 
ties issued  in  other  countries  of  the  Pan  American  Union.    Rights 
and  obligations  of  stock  and  bond  holders  and  of  the  issuing  concerns. 
Deed  of  trust.    Nonreplevin  securities. 

(4)  To  obtain  the  listing  and  quotation  on  the  stock  exchanges  of 
the  United  States  of  securities  issued  in  Latin  America  and  on  the 
Latin- American  stock  exchanges  of  securities  issued  in  the  United 
States. 

III.  COMMERCIAL  ENTITIES  AND  CONTRACTS. 

(5)  Desirability   of   passing   adequate  legislation  in  regard  to 
agencies  and  branch  offices  of  American  entities  in  Latin  America 
and  Latin  American  in  the  United  States. 

(6)  Desirability  of  passing  laws  in  regard  to  reciprocal  rights  as 
well  as  for  the  execution  of  contracts  for  public  works  or  others,  and 
other  obligations  with  or  of  Governments,  municipalities,  and  other 
public  powers. 

(7)  To  legally  define  the  rights  and  obligations  of  parties  in  con- 
tracts celebrated  in  one  country  to  be  executed  in  the  other. 

(8)  To  legally  define  the  rights  and  obligations  of  buyer  and 
seller  in  verbal  or  written  contracts,  in  one  place  or  by  mail,  in  pur- 
chases and  sales,  on  usual  terms  of  i;  f.  o.  b."  (free  on  board)  at  ship- 

98257°— 15 37  577 


578  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

ping  place  or  at  destination,  "  f.  a.  s."  (free  alongside  of  ship)  at 
port  of  shipment  or  at  destination,  and  "  c.  i.  f ."  (cost,  insurance,  and 
freight). 

IV.  BILLS  OF  EXCHANGE,  BILLS  OF  LADING,  AND  CONSULAR  INVOICES. 

(9)  Desirability  of  passing  adequate  legislation  in  regard  to  bills 
of  exchange.     Obligations  and  rights  of  drawers,  drawees,  indorsers, 
and  holders.     Faculty  of  using  indiscriminatingly  Spanish,  Portu- 
guese, or  English  in  writing,  accepting,  indorsing,  protesting,  and 
canceling  bills  of  exchange.     To  permit  the  use  of  money  of  the 
country  of  origin  where  payable  or  other.     Days  of  grace.     Protest. 
Define  the  quality  of  "  Executive  title."    Define  the  interpretation  of 
the  words  "at  sight,"  "  on  demand,"  " days  sight,"  and  " days  date." 
Inconvertibility.    General  stamp  tax. 

(10)  To  define  legally  the  rights  and  obligations  of  parties  (ship- 
per, carrier,  consignee,  and  holder)  and  of  customs  of  ocean  bills  of 
lading  and  of  those  called  "through  bills  of  lading."    To  establish 
the  "order"  bill   of  lading  where  it  does  not  exist    (Colombia, 
Venezuela,  Panama,  and  the  Dominican  Republic). 

(11)  To  establish  uniform  consular  invoices  and  define  their  legal 
character.     To  permit  the  use  of  the  words  "to  whom  it  may  con- 
cern "  in  "  order  "  shipments. 

V.  CUSTOMS  AND  TRAVELING  AGENTS. 

(12)  To  provide  the  means  of  establishing  a  more  uniform  classi- 
fication in  the  import  tariffs;  to  determine  a  uniform  manner  of 
classifying  goods  not  enumerated  in  the  tariffs  of  each  country. 

(13)  To   establish   uniform  regulations  for  the  importation  of 
samples  with  or  without  value   and  advertising  material,   or  for 
propaganda,  with  or  without  value,  by  freight,  parcel  post,  or  by 
mail. 

(14)  To  provide  reasonable  means  for  storage  of  goods  left  as 
collateral  subject  to  d/p  (documents  against  payment),  drafts,  and 
abandoned  goods.    Laws  of  "  warrants." 

(15)  To  establish  uniform  regulations  for  traveling  agents  and  a 
reasonable  scale  of  taxes. 

VI.  POSTAL,  TELEGRAPH,  AND  TELEPHONE  SERVICE. 

(16)  To  extend  the  parcel-post  service  to  all  countries  where  it 
does  not  exist.    To  facilitate  the  reexpedition  on  one  postage.    Order 
parcels.     C.  O.  D.  and  insurance  services.     To  extend  the  postal 
money  order  service  to  all  countries  where  it  does  not  exist. 


MEMORANDUM   BY  ECUADOR.  579 

(17)  To  establish  the  minimum  rate  between  the  countries  of  the 
Pan  American  Union  (domestic  rates)  and  to  improve  the  service. 

(18)  To  study  the  convenience  of  establishing  inter- American  land 
lines,  with  uniform  rates. 

(19)  To  study  the  convenience  of  developing,  on  a  mutual  basis, 
the  long-distance  telephone  service. 

(20)  To  study  the  convenience  of  establishing  interlocked  radio- 
graphic  stations  on  the  entire  continent. 

VII.  COMMERCIAL  FACILITIES. 

(21)  To  pass  adequate  legislation  in  regard  to  rights  and  obliga- 
tions of  consignors,  consignees,   and  creditors  in  consigned  mer- 
chandise and  products.    To  define  the  entailment  of  goods  to  accept- 
ances or  advances  against  them. 

(22)  To  simplify  legal  commercial  documents  (powers  of  attor- 
ney, contracts,  transfers)  to  be  used  in  another  country. 

(23)  To  establish  uniform  laws  in  regard  to  commercial  hygiene 
and  sanitation. 

(24)  To  establish  the  chattel  mortgage  for  agricultural,  industrial, 
mining,  and  manual  machinery,  as  well  as  for  the  necessary  imple- 
ments for  these  industries  and  furniture. 

VIII.  TRADE-MARKS  AND  PATENTS. 

(25)  To  reform  the  laws  in  regard  to  trade-marks  in  order  to 
make  them  as  uniform  as  possible  and  to  impede  piracy   (Treaty 
1910). 

(26)  To  modernize  and  muke  uniform  laws  in  regard  to  patents 
and  privileges  (exclusive  rights). 

IX.  IMMIGRATION  AND  MINES,  ACQUISITION  OF  LAND. 

(27)  To  revise  and  modernize  immigration  and  mining  laws. 

(28)  To  revise  and  modernize  laws  for  the  acquisition  of  public 
lands. 

X.  NAVIGATION. 

(29)  To  facilitate  inter- American  maritime  communication,  grant- 
ing franchises  to  ships  of  one  country  in  the  other.    Establishment 
of  free  zones  for  the  manufacture,  transshipment,  and  distribution 
of  products  and  merchandise. 

(30)  Unification  as  much  as  possible  of  the  service  of  the  different 
transportation  companies  of  the  Pan  American  countries  for  cargo, 
mails,  and  passengers. 


580  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

XI.  PAN  AMERICAN  UNION. 

(31)  That  the  office  of  the  union  compile  and  publish  in  English, 
Spanish,  and  Portuguese  the  laws  of  commercial  interest  of  the  20 
Latin- American  countries. 

(32)  To  appoint  a  permanent  committee  to  secure  the  adoption  of 
the  resolutions  of  the  conference  and  to  prepare  in  accord  with  the 
governing  board  of  the  union  the  material  and  formulate  the  pro- 
gram of  future  commercial  and  financial  conferences. 

(Signed)  JUAN  CUEVA  GARCIA. 

VICENTE  GONZALES  B. 
ENRIQUE  GALLARDO. 


MEMORANDUM  SUBMITTED  BY  DR.  PEDRO 

RAFAEL  CUADRA,  DELEGATE  OF  THE 

REPUBLIC  OF  NICARAGUA 


581 


MEMORANDUM  SUBMITTED  BY  DR.  PEDRO  RAFAEL  CUADRA, 
DELEGATE  OF  THE  REPUBLIC  OF  NICARAGUA  TO  THE  PAN 
AMERICAN  FINANCIAL  CONFERENCE. 


I.  ECONOMIC  SITUATION  OF  NICARAGUA. 

The  economic  situation  of  Nicaragua  is  not  quite  satisfactory. 
For  more  than  fifteen  years  the  country  had  an  inflated  currency. 
Under  such  conditions  there  can  be  nothing  but  general  poverty,  and 
in  consequence  commerce  fails.  It  is  no  wonder,  therefore,  that  con- 
ditions in  Nicaragua  are  bad.  Apart  from  political  causes,  it  seems 
to  me  that  the  long  existence  of  a  system  of  paper  currency  accounts 
for  the  country's  present  economic  disturbance. 

To  remedy  this  bad  situation  the  present  Government  of  Nica- 
ragua started  a  series  of  economic  reforms,  which  are  being  carried 
out  with  firmness.  The  first  and  principal  aim  sought  was  to  put 
an  end  to  the  inflation.  This  we  realized  by  enacting  a  monetary 
law,  which  has  been  in  operation  for  the  last  two  years.  Our  mone- 
tary system  is  now  based  on  a  gold  standard.  The  monetary  unit, 
the  "  cordoba,"  is  worth  a  dollar.  We  have  no  gold  coin,  only  silver 
and  bank  notes.  To  maintain  the  cordoba  at  par  with  the  American 
dollar  there  is  a  "  conversion  fund  "  in  the  United  States  and  Europe, 
against  which  drafts  are  drawn  periodically  after  natural  demands. 

When  the  European  war  broke  out  it  was  thought  wise  to  sus- 
pend the  selling  of  drafts  to  prevent  the  exhaustion  of  the  fund 
because  of  the  panic.  Then  exchange  went  up.  As  our  trade  bal- 
ance is  not  favorable,  the  rate  of  exchange  reached  the  maximum  of 
25  per  cent  premium,  i.  e.,  $100  American  gold  was  worth  $125 
cordobas.  At  present  conditions  are  improving  and  the  rate  of  ex- 
change is  only  108  per  cent. 

II.  BANKS. 

Next  to  the  monetary  reform  comes  the  establishment  of  the 
National  Bank  of  Nicaragua.  This  bank  has  the  exclusive  privi- 
lege of  issuing  legal-tender  notes,  strictly  subject  to  the  provisions 
of  the  monetary  law,  and  for  the  account  of  the  Republic  only. 
Forty-nine  per  cent  of  the  stock  of  the  national  bank  is  owned 
by  the  National  Government,  51  per  cent  being  the  property  of 
American  bankers.  The  bank  does  all  sorts  of  banking  business.  It 
has  a  special  issue  department  for  the  maintenance  of  the  national 

583 


584  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

currency.    Its  capital  is  $300,000,  which  may  be  increased  if  necessary 
to  meet  the  country's  needs. 

There  are  two  more  banks  in  the  country.  These  are  private 
credit  institutions,  whose  charters  were  granted  by  the  Government. 
They  do  every  sort  of  banking  business  except  the  issuing  of  notes. 
Their  capital  is  small,  but  they  are  doing  as  good  business  as  their 
limited  resources  permit.  We  expect  the  country  to  prosper  when 
the  evils  of  the  past  inflation  are  entirely  gone.  Then  conditions  will 
be  better.  We  will,  furthermore,  encourage  the  establishment  of 
other  banking  institutions  to  contribute  to  our  financial  develop- 
ment. 

III.  BUSINESS  CONDITIONS. 

Business  conditions  have  not  been  good.  Owing  to  an  overissue 
of  paper  money  the  merchants  overstocked  their  stores  to  satisfy 
the  general  demands.  This  commerce  was  unsound,  and  the  conse- 
quence was  that  when  the  Government  started  the  monetary  reform 
and  things  became  normal  it  began  to  decrease,  or,  better  to  say,  to 
reduce  itself  to  normal  conditions.  This  was  the  state  of  affairs 
when  the  European  war  broke  out.  Then  foreign  credit  was  stopped, 
and  to  prevent  the  failure  of  the  principal  firms  the  Government 
was  forced  by  public  demand  to  declare  a  moratorium.  Notwith- 
standing this  prices  have  continued  normal,  as  the  stoppage  of  big 
importations  has  caused  the  selling  out  of  much  surplus  stock.  If 
the  war  comes  to  an  end  soon,  our  commerce  will  be  able  to  start 
business  again  under  better  conditions  with  the  European  markets. 
If  not,  then  trade  with  the  United  States  will  spring  up  vigorously. 
At  present  a  third  of  our  trade  is  with  the  United  States.  If  the 
manufacturers  of  the  United  States  desire  to  increase  their  trade, 
they  should  grant  the  merchants  the  same  terms  of  credit  as  Europe 
allowed  them  before  the  war. 

IV.  ARTICLES  or  EXPORTS. 

Our  principal  articles  of  exports  are  coffee,  gold,  and  bananas. 
We  also  export  hides,  rubber,  and  cattle.  The  last  mentioned,  though 
very  extensive  as  a  part  of  the  country's  wealth,  has  not  formed  as 
yet  an  important  item  of  our  export  statistics  owing  to  the  scarcity 
of  good  roads  to  facilitate  their  exportation.  It  is  to  be  desired  that 
the  fresh-meat  trade  with  foreign  countries  be  started,  but  nothing 
as  yet  has  been  done  in  this  line. 

Y.  AGRICULTURAL  RESOURCES. 

Nicaragua  is  an  agricultural  country;  but,  unfortunately,  the 
methods  of  farming  employed  are  very  primitive.  There  is  scarcely 
a  notion  of  scientific  agriculture.  The  yield  is,  therefore,  very  poor. 


MEMOEANDUM  BY  NICARAGUA.  585 

We  expect  that  when  we  improve  our  methods  of  farming  and  start 
scientific  processes  general  conditions  will  be  better.  The  present 
administration  of  Nicaragua  has  had  as  one  of  the  planks  of  its 
platform  the  fostering  of  this  branch  of  national  prosperity,  through 
agricultural  schools,  experimental  stations,  agricultural  banks,  etc., 
but  it  has  not  been  able  as  yet  to  do  anything  in  this  line  because 
of  lack  of  money,  and  also  because  its  time  has  been  occupied  in 
other  reforms,  if  not  more  vital,  at  least  more  urgent. 


TRANSPORTATION. 


The  transportation  question  is  very  serious  for  Nicaragua.  This 
item  is  one  of  our  great  problems.  The  Government  is  aware  of  its 
seriousness.  It  is  not  a  question  here  of  a  general  system  of  good 
roads  crossing  all  over  the  Kepublic.  Of  course,  that  is  a  general  de- 
sire ;  but  Nicaragua's  problem  as  a  country  is  more  concrete ;  it  is  a 
problem  whose  solution  is  clear  to  us,  and  the  Government  is  well 
acquainted  with  all  its  data.  We  will  not  cease  to  hammer  at  it  till 
it  is  solved ;  not  only  because  its  solution  will  open  a  channel  of  good 
commerce  and  trade,  but  also  because  it  is  a  vital  issue  of  political 
welfare  and  unity. 

We  lack  easy  communication  with  the  Atlantic  coast,  and  in  this 
region  are  the  richest  settlements  of  the  Republic.  A  long  time  ago 
we  had  a  good  river  route  to  the  Atlantic.  The  River  San  Juan 
was  then  navigable,  and  San  Juan  del  Norte  was  a  good  seaport. 
Now  all  this  is  lost.  To  restore  it  to  its  old  conditions  would  im- 
prove our  domestic  and  foreign  trade.  It  is  to  be  noted  that  when 
the  San  Juan  Elver  was  open  to  commerce  the  Republic  was  pros- 
perous. When  it  was  closed  conditions  became  bad,  and  the  old 
prosperity  was  lost.  This  fact  is  more  than  a  mere  coincidence. 
It  is  the  sequel  of  natural  processes.  With  the  San  Juan  River 
in  good  condition  prosperity  will  come  back  to  the  country,  because 
it  will  restore  vast  areas  of  rich  lands  to  production,  and  cattle  will 
find  a  proper  outlet  to  foreign  markets.  If  the  river  can  not  be 
made  navigable,  the  Government  has  thought  of  the  possibility  of 
building  a  railroad  from  one  of  the  ports  on  the  Lake  of  Nicaragua 
to  the  Atlantic  coast.  The  Panama  Canal  has  bettered  conditions 
in  this  particular,  but  it  can  not  cure  the  evil  radically.  Needless 
to  say,  the  Government  has  not  been  able  to  do  anything  in  this 
affair,  because  it  has  had  neither  the  resources  nor  the  opportunity 
necessary  for  the  railroad  construction  or  for  the  improvement  of 
the  River  San  Juan,  though  twice  it  has  intended  to  do  so,  having 
entered  into  contracts  to  that  effect. 

On  the  Pacific  side  conditions  are  better.  We  have  a  good  rail- 
road from  Corinto,  a  Pacific  port,  to  Granada,  a  port  on  the  Lake 
of  Nicaragua,  passing  through  Chinandega  and  Leon,  important 


586  PAN  AMERICAN   FINANCIAL  CONFERENCE. 

cities  with  prosperous  commerce,  and  Managua,  the  Republic's  capi- 
tal. To  run  this  railroad  a  company  was  formed,  incorporated  in  a 
State  of  the  United  States ;  49  per  cent  of  the  stock  is  owned  by  the 
Government  and  51  per  cent  by  American  capitalists.  The  railroad 
is  in  good  condition  and  every  day  is  improving. 

VI.  PUBLIC  FINANCES. 

The  situation  of  our  public  finances  can  be  stated  in  a  few  words. 
The  treasury  has  been  and  still  is  in  difficulties.  It  could  not  be 
otherwise.  The  long  period  of  inflation,  the  frequent  recurrence  of 
revolutions,  former  bad  governments,  etc.,  account  for  these  bad 
conditions.  To  remedy  this  evil  the  present  Government  of  Nic- 
aragua asked  a  helping  hand  from  the  United  States.  Through 
the  good  offices  of  the  State  Department  we  were  able  to  enter  into 
relations  with  two  important  American  firms,  Brown  Bros,  and 
J.  &  W.  Seligman  &  Co.,  of  New  York.  With  their  aid  we  have, 
despite  the  bad  conditions  referred  to  above,  started  and  carried 
out  the  monetary  reform,  the  establishment  of  the  national  bank 
and  the  reorganization  of  the  national  railroad.  Other  minor  eco- 
nomic reforms  have  also  been  carried  out.  Nicaragua  is  quite  satisfied 
with  its  business  relations  with  the  above-named  firms,  and  see  in 
the  benefits  so  far  obtained  but  the  proof  that  for  a  country  to 
prosper  it  is  necessary  to  have  a  good  understanding  between  the 
government  and  capital  on  a  basis  of  confidence  and  good  will. 

The  Government's  income  is  small.  It  decreased  notably  when  the 
European  war  broke  out.  With  so  small  an  income,  the  Government 
could  not  continue  to  pay  its  way.  This  circumstance  forced  it  to  ask 
Congress  to  enact  a  proprietary  tax  law.  The  law  was  enacted  only 
for  two  years.  As  the  Government  revenues  are  not  enough  to  meet 
the  general  needs  of  the  administration,  the  Government  intends  to 
ask  Congress  to  establish  this  tax  law  permanently.  But  this  was 
not  enough  to  meet  the  entire  situation.  The  reducing  of  the  national 
budget  became  also  indispensable.  We  reduced  it  to  half  its  former 
amount.  In  this  way,  the  Government  weathered  the  storm  pro- 
duced by  the  European  war,  in  the  part  affecting  its  own  sphere. 

To  meet  the  country's  needs,  as  occasioned  by  the  stoppage  of  the 
European  credit,  the  Congress  authorized  the  National  Bank  of 
Nicaragua  to  issue  1,000,000  cordobas  of  legal  tender,  backed  by 
commercial  paper,  to  provide  for  gathering  the  crops,  especially  that 
of  coffee.  This  provision  worked  satisfactorily ;  but  the  demand  for 
the  million  cordobas  authorized  by  the  law  never  reached  that  sum. 

I  neglected  to  state  that  the  Government,  in  order  to  run  the  public 
administration  with  so  decreased  a  revenue,  entered  into  contracts 
with  its  foreign  creditors  suspending  the  paying  of  the  principal 
and  interest  of  its  foreign  normal  debts.  As  our  creditors  were  will- 


MEMORANDUM  BY  NICARAGUA.  587 

ing  to  comply  with  the  Republic's  wishes,  there  was  no  difficulty  in 
reaching  an  agreement  between  them  and  the  Government. 

VII.  OUR  TRUE  FINANCIAL  PROBLEM. 

The  Nicaraguan  Government  has  been  facing  a  peculiar  situation 
entirely  independent  of  the  effects  of  the  war.  Almost  all  of  its 
debts  are  due  and  the  Government  has  had  no  time  nor  has  it  been 
in  a  favorable  situation  to  pay  them  off  or  to  refund  them.  Several 
times  it  has  tried  to  have  recourse  to  a  foreign  loan,  but  it  has  always 
failed  to  accomplish  it.  Now  it  expects  to  apply  the  $3,000,000  to 
be  paid  under  the  canal  treaty  with  the  United  States,  now  pending 
in  the  Senate,  to  the  payment  of  those  debts  which  are  more  pressing, 
paying  off  the  rest  with  bonds. 

The  similarity  between  our  present  conditions  and  problems  and 
those  of  the  United  States  after  the  Civil  War  has  always  attracted 
my  attention.  To  make  this  comparison  clearer  I  think  it  relevant  to 
copy  the  following  statement  of  Prof.  Bastable  about  conditions  in 
the  United  States  after  the  Civil  War : 

The  first  results  of  the  contest,  he  says,  were  a  serious  disturbance  of  in- 
dustry and  commerce  and  a  great  increase  of  expenditure.  No  adequate  tax 
system  was  in  existence  and  accordingly  the  extraordinary  expenditure  was  at 
first  almost  entirely  met  by  the  use  of  credit.  Treasury  notes,  culminating  in 
unconvertible  paper  issues,  and  funded  debts  were  both  employed.  *  *  * 
The  great  financial  problems  for  the  Secretary  to  the  Treasury  were  therefore 
j;i)  to  pay  off,  or  fund,  the  floating  debt,  and  (2)  to  provide  a  permanent 
scheme  for  the  future  extinction  of  the  immense  liabilities  created  by  the  war. 
(Public  Finance,  653-654.) 

I  can  not  find  better  words  to  convey  to  your  attention  a  clear  idea 
of  our  true  problems  than  those  used  by  Prof.  Bastable  to  state  that 
grave  situation  of  the  United  States.  The  origin  of  our  pressing 
debts  is  nearly  the  same.  The  Secretary  of  the  Treasury  of  the 
United  States  spent  over  two  years  in  improving  financial  conditions. 
This  was  possible  especially  because  of  the  great  resources  the  na- 
tional credit  put  at  his  command.  Needless  to  say  that  we  have  not 
been  so  well  situated.  Our  nation's  credit  is  almost  nil.  We  have 
been  trying  to  build  it  up  to  the  best  of  our  ability,  but  the  results 
as  yet  are  not  very  satisfactory,  though  we  can  not  be  disappointed 
with  those  already  obtained. 

For  this  reason  it  would  only  accomplish  the  best  of  our  wishes 
to  secure  the  cooperation  of  the  Treasury  Department  of  the  United 
States  for  us  to  manage  successfully  these  vital  problems.  We  expect 
something  of  this  kind  of  cooperation  to  be  the  outcome  of  the  Pan 
American  Financial  Conference,  confident  that  once  having  solved 
our  financial  problems  our  international  trade  with  the  United  States 
will  increase  and  prosper  to  our  mutual  advantage. 


MEMORANDUM  SUBMITTED  BY  THE  DELEGATION 
OF  THE  REPUBLIC  OF  PANAMA 


589 


MEMORANDUM  SUBMITTED  BY  THE  DELEGATION  OF  THE 
REPUBLIC  OF  PANAMA. 


The  delegation  of  Panama  to  the  Pan  American  Financial  Con- 
ference has  the  honor  to  submit  for  the  consideration  of  the  Secre- 
tary of  the  Treasury  of  the  United  States  the  following  matters, 
which  are  of  special  interest  to  the  Republic  of  Panama : 

I.  The  revenues  of  the  Republic  of  Panama  have  decreased  30  per 
cent  since  July,  1914,  and  this  decline  is  due  to  the  following  causes : 

(a)  The  diminution  of  imports  due  to  the  European  war. 

(&)  The  decline  of  local  commerce  due  to  the  establishment  of 
commissaries  by  the  government  of  the  Canal  Zone.  The  commis- 
saries import  merchandise  without  paying  duties,  and  is  thus  able 
to  eliminate  competition  of  the  merchants  of  Panama. 

II.  In  order  to  meet  the  decline  in  revenues,  Panama  has  passed 
laws  imposing  certain  temporary  taxes  and  increasing  by  20  per  cent 
the  ad  valorem  customs  dues  on  imported  merchandise.     This  in- 
crease, however,  can  not  become  effective  without  the  consent  of  the 
Government  of  the  United  States,  as  provided  for  in  what  is  known 
as  the  Taft  agreement. 

The  delegation  of  Panama  deems  it  a  matter  of  urgent  necessity 
that  the  Government  of  the  United  States  should  give  its  approval 
to  this  increase  in  taxes  in  order  to  meet  the  situation  created  by  the 
decline  of  national  revenues. 

The  delegation  of  Panama  further  deems  it  advisable  that  the  two 
Governments  concerned — the  United  States  Government  and  the  Gov- 
ernment of  Panama — undertake  a  general  revision  of  all  matters  re- 
lating to  the  commissaries  in  order  to  establish  such  limitations  as 
will  be  equitable  for  both  countries  concerned. 

III.  The  commerce  of  Panama  suffers  by  reason  of  the  differential 
rules  established  by  the  Panama  Railroad  Co.,  a  company  which 
to-day  belongs  to  the  Government  of  the  United  States.    The  delega- 
tion of  Panama  sincerely  hopes  that  this  matter  will  be  considered 
by  the  conference,  in  order  to  arrive  at  some  conclusion  with  reference 
to  just  rules  which  will  at  the  same  time  serve  to  develop  commerce 
rather  than  to  destroy  it. 

591 


592  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

IV.  With  reference  to  all  other  matters  enumerated  in  the  pro- 
gram of  the  conference,  the  Republic  of  Panama  has  the  same  inter- 
ests as  the  other  countries  of  Central  and  South  America,  and  there- 
fore the  delegation  of  Panama  will  participate  in  the  discussion  of 
these  questions  in  the  hope  that  they  will  be  satisfactorily  solved  for 
the  mutual  benefit  of  the  United  States  and  the  countries  of  Latin 
America. 

(Signed)  ARISTIDES  ARJONA. 

RAMON  F.  ACEVEDO. 

RAMON  ARIAS,  JR. 


MEMORANDUM  SUBMITTED  BY  THE 
DELEGATION  OF  PARAGUAY 


9S257°— 15 38  593 


MEMORANDUM  SUBMITTED  BY  THE  DELEGATION  OF  PARAGUAY 
TO  THE  PAN  AMERICAN  FINANCIAL  CONFERENCE. 


ECONOMIC  AND  FINANCIAL,  CONDITION  OF  PARAGUAY. 

The  economic  and  financial  depression  produced  in  the  civilized 
world  by  the  gigantic  war  that  at  present  disturbs  Europe  has  made 
itself  felt  with  especial  violence  in  the  Latin- American  countries — 
which  for  the  greater  part  are  in  the  beginning  of  an  ever-progressive 
development — and  which  have  seen,  unexpectedly,  a  great  part  of 
their  markets  closed,  the  receipts  of  their  customhouses  diminished, 
their  budgets  impaired  to  a  marked  degree,  and  all  this  without  the 
time  requisite  to  adapt  themselves  to  the  conditions  or  at  least  lessen 
their  disastrous  effects. 

It  was  imperative,  therefore,  that  the  reaction  should  manifest 
itself  simultaneously  with  the  disturbance  felt,  and  that  each  one 
should  endeavor  to  find  the  corrective  of  this  situation  that,  par- 
alyzing or  devitalizing  its  economic  forces,  constituted  a  barrier  to 
its  progress. 

Countries  manufacturing  nothing,  or  almost  nothing,  with  raw 
materials  in  abundance  produced  by  their  soil,  lacking  in  opportune 
capital  to  facilitate  their  development  and  strength  sufficient  to 
promote  their  indispensable  activities,  it  was  to  be  expected  that  the 
attention  of  their  leading  men  would  be  directed  toward  the  great 
Eepublic  of  the  North,  which  in  the  course  of  extended  years  of 
assiduous  and  intelligent  labor  had  come  to  attain,  through  its  mate- 
rial and  moral  progress,  the  eminence  of  the  older  nations  of  Europe. 

The  Latin- American  countries  required  precisely  a  broad  and  cul- 
tivated field  of  production  and  consumption,  such  as  the  United 
States  affords,  which  will  absorb  the  raw  materials  that  its  industries 
require,  and,  in  its  turn,  furnish  the  manufactured  wares  that  are  not 
found  in  their  own  territories. 

The  occasion  and  the  circumstances,  although  unlocked  for  and 
compelling — at  the  same  time  acceptable — adapted  themselves  ad- 
mirably, moreover,  to  this  new  and  fraternal  reunion,  which,  without 
the  least  doubt,  will  succeed  in  removing  the  traditional  existing 
conditions  that,  until  the  present,  have  offered  vigorous  resistance 
to  a  closer  commercial  contact. 

595 


596  PAN  AMERICAN   FINANCIAL  CONFEEENCE. 

The  surprise  and  the  consequent  confusion  of  the  first  moment 
produced,  of  necessity,  as  might  easily  be  supposed,  a  certain  per- 
plexity of  mind  and  an  absence  of  definite  and  safe  means  for  the  at- 
tainment of  the  ends  in  view. 

The  call  that  we  have  obeyed  could  not  be  better  nor  more  oppor- 
tunely inspired,  giving  us  the  occasion,  if  not  to  expound  ample 
and  erudite  concepts  over  the  economic  and  financial  relations  of  our 
continent — which,  for  my  part,  I  leave  to  those  more  experienced  in 
these  matters — to  define,  by  presenting  them  with  clearness  and  frank- 
ness, the  present  conditions  and  difficulties  of  our  respective  coun- 
tries, and  which  may  serve  as  a  basis  for  an  advantageous  common 
and  simultaneous  action. 

The  interchange  of  products  and  its  necessary  means  of  attain- 
ment— which  we  call  "  commerce  " — prevail  through  necessity  and  in- 
terest, guided  in  their  turn  by  the  perfect  .and  minute  understanding 
of  the  fields  wherein  this  mutual  activity  shall  be  manifested.  If  the 
course  established  and  assured  since  the  remote  ages  which  we  have 
just  indicated  offers  of  its  own  accord  an  obstacle  difficult  to  over- 
come in  the  sense  of  the  increase  of  commerce,  which  we  desire,  the 
insufficiency  of  appreciation  of  our  own  economic  resources  and 
forces  constitutes  a  no  less  effective  and  powerful  impediment. 

The  circumstances  impel  us,  therefore,  to  an  intelligent,  energetic, 
and  persevering  effort,  of  whose  felicitous  outcome  there  can  be  no 
doubt,  when  a  Congress  such  as  the  present,  made  up  of  eminent 
experts — in  very  truth  Americans — has  taken  under  consideration 
the  simplification  of  the  problems  that  we  propose  to  resolve. 

With  this  conviction,  strengthened  by  fervent  hopes,  I  shall  take 
occasion  to  delineate  the  most  salient  features  that  my  country  pre- 
sents as  a  field  of  activity,  hardly  touched,  for  agriculture,  stock 
raising,  industry,  and  commerce. 

Situated  in  the  center  of  South  America,  with  a  superficial  area  of 
approximately  445,000  square  kilometers,  traversed  from  north  to 
south  by  a  noble  river,  and  bounded  in  part  by  another  of  no  less  im- 
portance, which  bring  it  in  contact  with  the  ocean,  its  immense  nat- 
ural riches  have  scarcely  been  disturbed  by  a  population  that  hardly 
approximates  1,000,000. 

With  a  mild  and  healthy  climate,  its  soil,  of  exceptional  fertility, 
is  adapted  for  the  cultivation  of  almost  all  tropical  and  subtropical 
fruits,  many  of  them  suitable  for  exportation  on  a  large  scale,  such 
as :  YERBA  MATE,  whose  use  is  becoming  more  extensive  from  day  to 
day,  and  which,  in  the  shape  of  native  groves,  occupies  in  Paraguay 
an  approximate  area  of  25,000  square  ^kilometers.  The  artificial  cul- 
tivation of  this  curious  plant,  tried  until  recently  without  result,  has 
finally  been  successful,  and  to-day  prosperous  and  extended  planta- 


MEMORANDUM  BY  PAEAGUAY.  597 

tions  of  it  may  be  seen ;  TOBACCO,  which  constitutes  one  of  the  princi- 
pal sources  of  riches  of  the  country,  although  its  quantity  is  as  yet 
at  a  minimum  of  the  producing  capacity  of  the  soil.  Its  cultivation 
is  being  perfected  every  day,  thanks  to  the  efforts  of  the  Banco 
Agricola,  which  uninterruptedly  combats  the  routine  practices  of 
former  times;  ORANGES  and  MANDARINS,  unsurpassed  for  their  excel- 
lent quality,  and  although  their  exportation  has  passed  160,000,000 
annually,  there  yet  remains  incalculable  quantities  that  it  is  impos- 
sible to  utilize,  due  to  the  impracticability  of  bringing  them  to 
points  of  transportation ;  ESSENCE  OF  PETIT-GRAIN,  appreciated  in  the 
United  States  as  well  as  in  Europe  and  conspicuous  among  the 
special  products  of  the  country ;  COTTON,  renowned  for  its  fine  quality, 
of  long,  silky,  and  strong  fiber,  is  a  plant  for  whose  cultiva- 
tion the  soil  of  Paraguay  is  adapted  in  an  exceptionally  favorable 
manner.  Its  yield  is  proportionally  superior  to  that  of  any  other 
cotton-raising  country — more  than  1,000  kilograms  per  hectar ;  SUGAR 
CANE,  of  easy  and  profitable  cultivation,  which  yields  more  than 
48,000  kilograms  per  hectar;  RICE,  whose  quality  places  it  on  a  par 
with  the  best  of  the  Carolinas  and  of  Piedmont ;  INDIAN  CORN,  with 
a  production  of  1,600  kilograms  per  hectar,  and  as  much  as  two 
crops  per  year ;  MANDIOCA,  COFFEE,  WHEAT,  OLIVES,  the  MAMON,  from 
which  papain  is  extracted,  coco,  RAMIE,  BARLEY,  PEANUTS,  VANILLA, 
CINNAMON,  GRAPES,  TARTAGO,  f  rom  which  we  get  castor  oil,  the  POROTO, 
GARBANZOS,  etc.,  etc.,  and  the  numberless  varieties  of  cultivated  and 
uncultivated  fruits,  whose  exportation  to  the  neighboring  countries 
is  limited  only  by  the  lack  of  adequate  means  of  transportation. 

One-half  of  the  total  area  of  Paraguay,  approximately,  is  occu- 
pied by  forests,  in  part  yet  virgin,  which  contain  an  incalculable 
wealth  in  woods, — for  construction  and  for  cabinetmaking — the  most 
appreciated  in  America.  Their  simple  enumeration  would  exceed  in 
extent  the  limits  of  this  sketch ;  I  shall,  for  this  reason,  confine  myself 
to  the  mention  of  those  best  known,  which  have  already  been  the  ob- 
jects of  commercial  activity  in  the  places  accessible  to  means  of  trans- 
portation; the  CURUPAY,  of  almost  indefinite  durability,  remaining 
intact  in  the  water  or  underground  and  against  the  inclemencies  of 
the  weather ;  its  bark  is  utilized,  with  excellent  results,  for  the  tannin 
that  it  contains ;  the  LAPACIIO,  comparable  to  the  preceding  for  its  du- 
rability and  resistance,  with  the  advantage  of  its  greater  flexibility 
and  adaptability,  in  consequence,  to  certain  special  uses,  construction 
of  boats,  railway  coaches,  etc. ;  the  INCIENSO,  used  in  the  manufacture 
of  furniture,  is  strong  and  flexible,  and  is  known  for  its  character- 
istic odor;  the  IBIRARO,  very  elastic  and  tough,  although  less  hard 
than  those  preceding,  is  fit  for  the  building  of  boats  and  railway 
coaches,  with  advantage  equal  if  not  greater  than  teakwood;  the 
CEDAR,  very  large  and  abundant,  may  well  take  the  place  of  mahogany 


598  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

and  walnut  in  the  finer  grades  of  cabinetmaking,  easy  to  work  and  to 
polish,  it  is  never  attacked  by  insects ;  the  PETEREBY,  a  tall,  straight, 
beautiful  tree,  is  much  used  in  cabinetmaking,  and  sometimes  in  the 
construction  of  railway  coaches ;  the  IBYRAPYTA,  very  common,  is  suit- 
able for  paving  blocks ;  the  TIMBO,  of  a  beautiful  reddish  color,  for  its 
qualities,  as  well  as  for  its  abundance  and  cheapness,  is  used  many 
times  in  place  of  pine;  the  LAUREL,  retaining  its  soundness  in  water 
and  underground,  is  used  for  railway  ties  and  in  the  construction  of 
boats;  the  GUAYAYBI,  very  elastic,  flexible  and  very  durable,  is  used 
for  tool  handles  and  in  the  manufacture  of  carriages  and  wagons ;  it 
is  superior  to  the  North  American  hickory ;  the  PALO  SANTO,  very  fra- 
grant and  resinous,  is  suitable  for  axle  bearings,  in  place  of  metal; 
the  CURAPAYRA  ;  the  URUNDEY-MI  ;  etc.,  etc. 

Worthy  of  particular  mention  is  the  QUEBRACHO,  which  in  some 
regions  forms  heavy  forests,  of  which  many  are  as  yet  untouched  on 
account  of  their  remoteness  from  means  of  transportation.  Its  great 
industrial  value  as  a  source  of  production  of  tannin,  as  a  wood  for 
construction,  and,  above  all,  for  its  qualities  incomparable  for  rail- 
way ties  is  well  known  to  all. 

The  mention  of  dye,  textile,  and  medicinal  plants  that,  through 
their  uses,  abundance,  and  variety,  might  be  the  object  of  profitable 
exploitation — as  yet  not  begun — will  complete  this  sketch,  too  sum- 
marized, of  the  sylvan  wealth  of  Paraguay. 

Among  the  numerous  resources  on  which  my  country  depends, 
CATTLE  RAISING  is  one  of  those  that  up  to  the  present  time  has  proven 
most  profitable,  although  on  a  scale  as  yet  very  remote  from  the 
extent  and  conditions  under  which  it  will  be  able  to  yield  all  its 
advantages. 

With  abundant  pastures  of  the  first  quality,  with  sufficient  water 
and  the  natural  shelter  that  the  forests  offer,  with  a  salubrity  unex- 
celled, the  prairies  of  Paraguay  constitute,  in  the  words  of  a  resi- 
dent, "  the  ideal  land  for  the  breeding  and  fattening  of  live  stock." 
The  interest  that  this  industry  has  aroused  of  late  among  North 
American  capitalists  is  an  omen  of  an  early  increase,  and  a  promise 
of  new  and  fruitful  undertakings. 

In  this  connection  we  may  refer  to  the  Paraguay  Land  &  Cattle 
Co.  with  large  tracts  of  land  in  the  Chaco,  in  full  operation  and 
prospering,  and  to  the  Chaco  Land  &  Cattle  Co.  of  Paraguay  which 
is  now  in  active  organization.  A  North  American  concern  has 
lately  applied  to  the  Congress  for  the  necessary  concession  for  the 
establishment  of  a  refrigerating  plant,  which  concession  will  surely 
be  granted. 

The  minerals  best  known  and  most  abundant  in  Paraguay  are: 
IRON,  MANGANESE,  and  COPPER,  at  the  present  time  unworked,  although 
one  of  them,  especially  manganese,  might  well  be  exploited  with 


MEMORANDUM  BY  PARAGUAY.  599 

profitable  results.  The  dearth  of  careful  scientific  data  does  not 
permit  the  affirmation,  in  a  positive  manner,  of  the  existence  of 
other  minerals,  or  the  estimation  of  their  extent. 

The  most  important  materials  for  construction  are  LIME  and  CE- 
MENTS, which,  according  to  repeated  analyses,  contain  more  CALCIUM, 
SILICATE,  and  ALUMINUM  than  their  similars  elsewhere,  and,  on  the 
other  hand,  are  found  free  from  deleterious  or  unnecessary  sub- 
stances; also  PORTLAND  STONE  and  PREPARED  PORTLAND,  CLAYS  for 
earthenware  and  fire  brick,  KAOLIN,  HYDRAULIC  STONE,  and  FLAGSTONE. 

Among  the  ornamental  stones  in  the  pavilion  of  Paraguay,  at  the 
exposition  at  Buenos  Aires  in  1910,  were  exhibited  19  speci- 
mens of  marble  that  were  admired  for  their  beauty  and  for  the 
variety  of  their  colors,  2  specimens  of  SLATE,  2  samples  of  AGATE,  and 

1  of  NOBLE  SERPENTINE. 

Because  of  her  meager  capital  and  slender  population,  the  in- 
dustrial life  of  Paraguay  has  hardly  begun,  in  spite  of  the  extensive 
and  varied  opportunities  for  exploitation  afforded  by  her  innumerable 
natural  resources. 

The  undertakings  that  we  might  cite  as  unfolding  their  activities 
are  almost  all  in  the  forest  industries.  They  are,  in  the  tannin  in- 
dustry, those  of:  Puerto  Casado,  one  of  the  most  important  of  its 
kind  in  South  America,  with  the  most  improved  machinery  and  a 
capacity  for  producing  450  tons  of  extract  each  month;  Puerto 
Sastre,  with  equipment  for  working  1,000  tons  of  extract  monthly; 
Puerto  Max  and  Puerto  Maria,  belonging  to  the  same  company, 
with  machinery  of  the  highest  grade  and  capable  of  producing  TOO 
tons  per  month;  Puerto  Galileo,  one  of  the  most  nearly  perfect 
equipments  and  a  producing  capacity  of  750  tons;  and  others  be- 
sides. 

Among  the  exploitations  of  wood  for  export  there  figure  in  first 
importance  the  plants  of:  Nogues,  with  15  leagues  of  heavy  forest, 
from  which  they  cut  and  prepare  upward  of  10,000  beam  timbers 
per  year,  its  sawmill  making  a  specialty  of  the  preparation  of  rail- 
way ties;  Pinasco;  the  Sociedad  Forestal  del  Paraguay;  Cogorno; 
the  American  Quebracho  Co.,  with  extensive  properties  on  the 
River  Paraguay  and  at  Puerto  Medanos,  with  a  numerous  popula- 
tion (400  peons  are  constantly  working  in  its  very  rich  plants) ;  the 
Colonia  Uruguaya ;  Fasardi  y  Compania ;  the  New  York  &  Paraguay 
Quebracho  Co.;  the  River  Plate  Quebracho  Co.,  etc.  Almost  all  of 
these  have  their  own  railways  intended  for  the  transportation  of  the 
wood  to  the  ports  of  shipment. 

The  only  extensive  exploitation  of  YERBA  MATE  is  carried  on  by  the 
enterprise  known  as  the  Industrial  Paraguaya,  which,  starting  with 
a  capital  of  $1,000,000,  has  been  able  to  return  to  its  shareholders,  in 
the  shape  of  dividends  and  in  the  term  of  only  10  years,  five  times  the 


600  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

value  of  the  shares.  At  present  its  properties  are  valued  at  about 
4,000,000  pesos  gold. 

The  country  contains  only  two  packing  houses — that  of  Klsso  and 
that  of  San  Salvador — they  being  able  to  turn  out  annually,  the  for- 
mer 50,000  head  of  cattle  and  the  latter  30,000.  In  this  latter  is 
prepared,  in  addition  ,a  beef  extract  of  excellent  quality. 

Among  the  industries  that  have  as  a  basis  the  raw  materials  of  the 
country  we  must  finally  mention  the  sugar  mill  of  Tebicuari,  located 
on  the  banks  of  the  river  of  the  same  name,  with  machinery  of  the 
first  quality  and  with  its  own  plantations,  which  during  the  past  year 
provided  it  with  15,731  tons  of  sugar  cane,  approximately  the  half 
of  its  consumption. 

Two  noble  rivers,  the  Paraguay  and  the  Parana,  place  the  Republic 
in  communication  with  the  ocean  through  the  ports  of  Buenos  Aires 
and  Montevideo.  Divers  companies  maintain  a  regular  and  perma- 
nent service  between  these  cities  and  the  littoral  of  Paraguay  with 
luxurious  and  commodious  steamers  for  passengers  and  freight. 

A  railway  equipped  with  every  modern  convenience  has  lately 
been  inaugurated  between  the  cities  of  Asuncion  and  Buenos  Aires, 
crossing  the  Paraguay  by  means  of  a  ferry. 

Without  counting  the  local  railways,  almost  all  annexed  to  the 
plants  of  the  timber  industry,  there  is  now  under  construction  an 
important  road  which,  leaving  Asuncion,  extends  to  Parana,  oppo- 
site to  the  falls  of  the  Yguazu,  at  which  place  it  will  connect  with 
a  Brazilian  line,  extending  from  the  Atlantic. 

Other  concessions  of  like  character  have  been  granted  or  solicited 
from  the  Congress,  although  none  of  them  has  yet  passed  to  a  state 
of  consummation. 

As  means  of  transportation  in  the  interior,  there  exist  numerous 
rivers,  which  for  the  greater  part  require  cleaning  and  canalization 
in  order  to  be  utilized  to  their  full  extent. 

An  official  institution,  the  Departmento  de  Fomento  (National 
Development  Department),  with  its  directing  personnel  constituted 
almost  entirely  of  technicians  coming  from  the  North  American 
universities,  has  charge  of  the  construction  and  maintenance  of  the 
bridges,  roads,  canals,  ports,  etc.,  with  which  the  Government  is 
especially  concerned. 

Various  of  the  ports  are  in  course  of  construction  or  enlargement, 
and  the  well-known  house  of  Mac  Arthur  Bros.,  of  New  York,  will 
take  charge  very  soon  of  the  works  of  the  great  port  of  Asuncion. 

The  BANKS  all  have  their  principal  seat  at  the  capital  of  the  Re- 
public, and  some  of  them  branches  in  the  interior  cities.  Such  are 
the  Banco  de  la  Repiiblica,  with  an  authorized  capital  of  $20,- 
000,000  gold,  of  which  there  are  already  $6,000,000  subscribed;  the 
Banco  Mercantil  del  Paraguay,  with  an  authorized  capital  of 


MEMORANDUM  BY  PARAGUAY. 


601 


25,000,000  pesos  paper,  and  20,000,000  paid  in;  the  Banco  de 
Espana  y  America,  a  branch  of  the  institution  of  the  same  name 
established  in  Buenos  Aires,  with  a  capital  of  $2,200,000  gold.  These 
are  all  dedicated  to  banking  operations  in  general :  The  discount  of 
bills  and  notes,  current  accounts,  savings  accounts,  time  deposits, 
drafts  on  the  exterior,  etc. 

The  normal  banking  rate  is  12  per  cent  annually. 

The  Banco  Agricola  is  an  official  institution  that  is  authorized 
not  only  to  aid  farmers  and  manufacturers  with  loans  at  a  reduced 
rate  of  interest  but  to  plan  the  extension  and  improvement  of  culti- 
vation by  means  of  encouragement,  advice,  and  instruction.  It 
has  already  influenced  to  a  marked  extent  the  agricultural  progress 
of  the  country.  Its  capital,  15,000,000  pesos  legal  money,  has  lately 
been  increased  by  15,000,000  more. 

The  foreign  commerce  of  Paraguay  is  increasing  from  year  to  year, 
rapidly  and  progressively,  and  from  this  point  of  view  it  is  inferior 
to  no  other  American  or  European  country.  The  total  figure  of 
this  commerce  for  the  year  1913  is  $13,539,744  gold,  while  that  of 
the  year  1904  is  only  $6,761,991,  that  is  to  say,  an  increase  in  the 
decade  of  100  per  cent,  more  or  less. 

Here  is  a  table  showing  this  movement,  most  significant  in  itself: 


Year. 

Importation. 

Exportation. 

Year. 

Importation. 

Exportation. 

1904 

$3  565  731.00 

$3  196  260  00 

1909 

S3  787  951  28 

$5  136  638  62 

1905 

4  678  314  25 

2  833  009  21 

1910 

6  419  412  96 

4  916  918  25 

1906  

6,324,283.93 

2,  695,  047.  49 

1911 

6*694*995  63 

4*  735'  572*  83 

1907  .     . 

7,512  502.04 

3  236  109  63 

1912 

5  350  600  13 

4  235  723  36 

1908 

4  072  953  04 

3  867  094  50 

1913 

8  119  997  09 

5  630  929  13 

In  the  year  1914  the  effects  of  the  European  war  made  themselves 
felt  immediately,  reducing  the  imports  to  $5,149,464.99  and  the 
exports  to  $4,584,358. 

The  articles  of  importation  come  principally  from  Germany,  Eng- 
land, Argentina,  France,  Spain,  and  Italy  and  consist  for  the  greater 

part  Of  TEXTILES,  FOODSTUFFS,  HARDWARE,  ARTICLES  OF  FASHION,  WINES, 
SPIRITS,  DRUGS  and  CHEMICALS,  READY-MADE  CLOTHING,  CHINAWARE  and 
CROCKERY,  HATS,  RUGS  and  CARPETS,  FOOTWEAR,  JEWELRY,  and  RAILWAY 

and  TRAMWAY  MATERIALS.  It  is  interesting  to  note  that  in  this  enu- 
meration the  first  place  is  occupied  by  articles  required  for  the  prog- 
ress of  the  country — for  example,  WIRE  FOR  FENCES,  AGRICULTURAL  IM- 
PLEMENTS, TOOLS,  SHEET  and  BAR  IRON,  MACHINES  of  every  SOrt,  ELEC- 
TRICAL APPARATUS,  ARTICLES  intended  for  public  instruction,  and 
FOODSTUFFS  that  are  not  produced  in  the  country. 

The  basis  of  the  exportation  consists  in  LIVE  STOCK  and  its  by- 
products, WOOL,  DRIED  BEEF,  ORANGES,  TOBACCO,  COCOANUT  BRAN, 
ESSENCE  OF  PETIT-GRAIN,  EXTRACT  OF  QUEBRACHO,  YERBA  MATE,  PALMS, 

WOOD  of  every  kind,  etc. 


602 


PAN   AMERICAN   FINANCIAL   CONFERENCE. 


The  commercial  interchange  with  the  United  States,  although  yet 
of  minor  importance,  is  developing  with  increasing  progress. 
Here  is  a  table  corresponding  to  the  last  five  years : 


Years. 

Importation 
from  the 
United 

States. 

Exportation 
to  the 
United 
States. 

1910... 

$61  142 

829  170 

1911  ...                                         ... 

86  989 

34  516 

1912 

161  661 

9'  443 

1913 

187  867 

58*285 

1914  

173'  191 

64  655 

In  commerce  the  business  men  of  Paraguay  are  renowned  for 
their  honor,  and  European  houses,  with  a  knowledge  of  this  circum- 
stance from  their  long  years  of  experience,  have  never  undergone 
inconvenience  in  selling  to  them  at  long  credits,  or  in  waiting  pa- 
tiently for  epochs  of  crisis  to  pass  for  the  collection  of  their  dues. 

Great  failures  are  almost  completely  unknown  in  Paraguay,  and 
even  small  ones  are  a  rarity.  The  registers  of  the  tribunals  of  com- 
merce are  an  honor  to  the  country. 

The  financial  situation  is  as  follows:  Internal  debt,  balanced  De- 
cember 31,  1913,  total,  $559,675  gold,  and  $11,564,572  paper.  To 
this  there  is  to  be  added  $394,119  gold,  and  $33,913,373  paper, 
relating  to  claims  for  damages  done  to  individuals  during  past 
epochs  of  revolution,  which  will  certainly  be  reduced  in  amount 
when  they  are  examined  by  the  special  commission  that  has  this 
matter  in  charge.  Once  estimated  and  acknowledged,  it  will  be 
consolidated  in  accordance  with  a  law  proclaimed  on  February  1 
of  the  current  year,  which  fixes  the  interest  at  6  per  cent  annually 
and  establishes  a  system  for  its  amortization. 

The  balance  of  the  debt  of  the  treasury  to  the  Banco  de  la  Repii- 
blica,  of  $615,995.43  gold,  has  likewise  been  adjusted  by  granting  to 
said  establishment  the  collection  of  the  tax  of  $1  gold  that  is  im- 
posed on  the  exportation  of  each  hide  until  the  debt  shall  have  been 
extinguished. 

The  fiduciary  issue  of  65,000,000  pesos  has  recently  been  increased 
by  60,000,000  more,  with  which  the  debts  in  paper  to  the  Bancos 
de  la  Republica  and  Mercantil  were  liquidated;  the  arrears  of  the 
Treasury,  resulting  from  the  decrease  in  the  income  of  the  Govern- 
ment since  the  commencement  of  the  European  war,  have  been  met ; 
there  were  granted  15,000,000  pesos  for  agricultural  loans,  and  there 
were  set  aside  the  funds  necessary  for  the  completion  of  the  improve- 
ment of  the  ports,  already  commenced,  in  certain  of  the  river  cities. 
The  sum  total  of  paper  money  in  circulation  is,  then,  125,000,000 
pesos,  which,  reduced  to  gold,  at  the  rate  of  1,500  per  cent — which 
will  probably  be  that  fixed  by  the  Government  as  the  basis  for  con- 


MEMOEANDUM   BY  PAEAGUAY.  603 

version — represent  8,333,000  pesos,  or  an  equivalent  of  $8.33  per 
capita  for  the  million  inhabitants  of  my  country.  The  ratio  is 
moderate. 

The  fixing  and  maintenance  of  the  ratio  of  exchange  of  paper 
money  is  a  constant  preoccupation  of  my  Government.  To  this  end 
there  were  set  aside  the  customs  receipts  arising  from  the  duties  in 
gold  on  the  exportation  of  hides,  which  amount  to  approximately 
$300,000  annually.  The  sum  accumulated  in  this  way  was,  on  Sep- 
tember 25  of  last  year,  $1,508,684.33,  of  which  amount,  by  laws  of 
the  Congress,  there  were  utilized  $750,856.91,  leaving,  therefore,  in 
the  coffers  of  the  State  a  balance  of  $757,827.42.  The  profound  eco- 
nomic crisis  of  to-day  has  prevented  the  continuance  of  the  accumu- 
lation of  funds  by  the  method  referred  to,  making  it  absolutely  in- 
dispensable, in  consequence,  to  obtain  a  loan,  which,  added  to  the 
sum  already  mentioned,  should  satisfy  the  earnest  wish  of  the  Gov- 
ernment to  give  to  the  nation  a  sound  monetary  system. 

The  amount  of  the  foreign  debt — arising  from  the  loans  of  1871 
and  1872,  made  in  London — is  at  present  $3,370,418.12,  according  to 
the  calculations  of  the  office  of  the  auditor  of  the  nation,  the  liquida- 
tions of  the  past  three  years  not  being  at  hand.  The  interest  of  3 
per  cent  and  an  annual  amortization  of  one-half  per  cent — which 
are  the  terms  agreed  on  for  this  debt — have  been  paid  scrupulously 
at  all  times. 

The  principal  sources  of  income  on  which  my  country  depends  are : 
Customs  duties  from  imports  and  exports,  the  land  tax,  postal  tax, 
internal  consumption  revenues,  etc. 

The  customs  revenues  follow  naturally  the  movement  of  inter- 
national trade  and  thus  we  see  that  while  in  the  year  1904  they  were 
$1,423,141  gold,  they  increased  in  1913  to  $3,591,143  of  the  same 
money,  which  in  the  term  of  10  years  shows  an  increase  of  145  per 
cent. 

The  revenues  derived  from  other  sources  have  increased  in  a 
manner  yet  more  marked  than  the  customs  revenues.  They  were,  in 
1904,  $1,459,614  legal  money  and,  in  1913,  $6,420,762.  A  detailed 
study  demonstrates  that  this  increase  is  particularly  due  to  the  taxes 
that  affect  commercial  life. 

The  present  crisis  has  likewise  produced  a  marked  diminution  in 
these  figures,  particularly,  however,  in  the  customs  receipts. 

The  Government  of  the  Republic,  accurately  estimating  the  diffi- 
culties of  the  moment — so  uncertain  of  duration — has  taken  re- 
course to  stringent  measures  of  economy  by  reducing  the  budget  of 
national  expenses  to  its  possible  limits  and  by  suspending  the  comple- 
tion of  divers  public  works  until  a  more  favorable  time. 

HECTOR  VELAZQUEZ. 
WILLIAM  WALLACE  WHITE. 


MEMORANDUM  SUBMITTED  BY  THE  DELEGATION 

OF  PERU 


605 


MEMORANDUM  SUBMITTED  BY  THE  DELEGATION  OF  PERU. 


The  present  European  war  has  disorganized  economic  conditions 
the  world  over.  In  Peru,  as  in  all  civilized  nations,  the  effects  of 
the  armed  struggle  "of  the  most  powerful  peoples  of  Europe  have 
made  themselves  felt  with  considerable  severity  in  the  field  of  the 
national  finances. 

In  an  endeavor  to  find  means  to  minimize  the  consequences  of  the 
economic  crisis  which  the  war  has  brought  about  in  Peru,  Congress, 
the  Government,  and  the  different  municipalities  have  together 
adopted  several  measures  of  an  administrativp,  sociological,  and 
economic  nature  which,  it  is  believed,  will  tend  to  regulate  the 
anomalous  financial  condition  through  which  the  country  is  passing. 

When  any  nation  finds  itself  confronted  by  a  crisis  such  as  at  pres- 
ent exists  in  Peru  it  will  be  found  that  its  manifestations  are  these : 
General  mistrust  as  to  the  solvency  of  private  individuals  and  bank- 
ing institutions ;  disappearance  of  metallic  currency  and,  above  all,  of 
gold  coin,  which  is  merely  one  effect  of  the  preceding  circumstances ; 
and  a  reduction  in  the  fiscal  returns,  owing  to  the  paralization  of  most 
of  the  mercantile  life  of  the  country,  due  in  the  present  case  to  the  fact 
that  the  exporting  and  importing  nations  of  Europe  are  in  a  state 
of  war.  , 

As  a  consequence  of  these  circumstances,  three  means  have  been 
adopted  to  avert  the  effects  of  the  crisis :  The  protection  of  banking 
institutions  and  private  debtors  threatened  by  the  public  mistrust; 
the  substitution  of  metallic  currency  to  prevent  its  disappearance 
by  another  less  susceptible  of  concealment,  which  has,  however,  not 
been  completely  effective  in  the  present  case;  and  the  reducing  of 
State  expenses,  arranging  the  budget  to  meet  the  exigencies  of  the 
reduced  revenue.  The  measures  adopted  in  Peru  for  the  purpose  of 
minimizing  the  effects  of  the  crisis  have  revolved  around  the  three 
methods  mentioned  above. 

In  accordance  with  the  series  of  fundamental  principles  which  are 
always  present  during  times  of  financial  stress,  it  is  possible  to 
classify  the  methods  for  obtaining  relief  into  three  groups : 

First.  Methods  to  minimize  or  prevent  a  panic,  due  to  the  mis- 
trust of  the  solvency  of  banking  and  credit  institutions,  which  is 
characterized  by  the  immediate  withdrawal  by  depositors  of  their 
funds,  which  always  greatly  affects  the  normal  financial  life  of  the 

607 


608  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

country.  To  prevent  such  a  condition  of  affairs,  Congress  approved 
the  declaring  of  a  moratorium,  which  will  end  on  the  22d  of  August, 
1915. 

Second.  Methods  for  the  solving  of  the  currency  problem,  created 
by  the  disappearance  of  gold  coin  and  the  retention  of  silver.  To 
this  effect  the  Lima  and  foreign  banks  in  the  capital  issued  checks  to 
bearer  for  the  sum  of  $12,500,000.  Other  means  adopted  consisted 
in  forbidding  the  exportation  of  gold,  either  coined  or  in  bars,  as 
well  as  that  of  coined  silver. 

Third.  Methods  for  balancing  the  budget,  reducing  expenses  to 
the  exact  amount  of  the  government  revenue.  For  this  purpose 
Congress  voted  a  law  reducing  the  expenses  of  the  Republic  30  per 
cent,  while  the  taxes  on  alcohol  and  tobacco  were  increased  20  per- 
cent. The  revenue  from  liquid  capital  and  industrial  taxes  were 
likewise  increased. 

These  economies  effected  in  the  budget  and  the  increased  revenue 
from  taxation  mentioned  above  are  already  producing,  although 
slowly,  appreciable  results  of  a  favorable  nature. 

FINANCES  AND  COMMERCE. 

The  national  revenue  of  Peru,  for  the  years  mentioned  below,  was 
as  follows : 

1896 $5,  643,  570 

1906 12,  777,  315 

1910 13,  878,  875 

1911 14,  249, 040 

1912 16,  371,  685 

1913 17,  089,  870 

The  increase  in  national  revenue  in  the  seventeen  years  from  1896 
to  1913,  is  a  little  over  300  per  cent. 

During  the  year  1914  the  budget  of  1913  was  in  force;  that  is  to 
say.  that  the  budget  for  the  said  year  was  calculated  upon  and  the 
revenue  expected  to  yield  the  same  sum  as  had  been  required  for  the 
year  1913. 

The  expenditure  was  $17,771,885.  Owing  to  the  general  condi- 
tions, expenditures  have  been  reduced  30  per  cent  during  the  present 
year. 

The  following  are  the  figures  for  the  revenue  of  1913 : 

Pacific  coast  customhouses $6,352,  280 

River  customhouses 869, 180 

Tax  on  spirits 1,736,220 

Tax  on  sugar 487,040 

Tax  on  matches 174,670 

Salt   monopoly 1,  295,  765 

Tobacco    monopoly 2, 257,  625 

Opium  monopoly 86, 455 


MEMORANDUM   BY   PEEU. 


609 


Denatured  alcohol  tax. 
Municipal  excise  tax_. 
Post  offices 

Telegraphs 


$97, 580 

561, 265 

718, 475 

173,310 

Sundries  __  2,  280, 005 


$17,  089,  870 

The  net  revenue  from  the  customhouses,  which  in  1913  amounted 
to  $6,285,670,  had  fallen  in  1914  to  $4,828,250,  a  falling  off  from  the 
total  of  the  preceding  year  of  27  per  cent,  more  or  less,  the  second 
half  year  showing  a  still  further  reduction,  which  amounted  to  about 
47  per  cent,  in  relation  to  the  second  half  year  of  1913. 

Other  government  means  of  revenue  have  likewise  suffered  a  per- 
ceptible decrease,  although  not  so  considerable  as  that  noticed  in  the 
customhouse  receipts.  The  tax  on  spirits,  which  in  the  second  half 
year  of  1913  produced  $1,015,210,  in  the  corresponding  period  of 
1914  produced  $835,715,  a  reduction  of  $179,495,  equal  to  22J  per  cent. 
The  tobacco  monopoly,  which  in  the  second  half  year  of  1913  pro- 
duced $1,233,165,  in  the  corresponding  period  of  1914  produced 
$1,136,995,  a  reduction  of  $96,165,  equal  to  7f  per  cent.  The  total  loss 
on  taxes  during  the  second  half  year  of  1914  compared  with  the 
corresponding  period  of  1913  has  been  the  sum  of  $592,855.  The 
net  revenue  from  all  taxes  during  the  second  half  year  of  1913  was 
$3,863,500. 

This  falling  off  in  the  public  revenue,  which  had  not  been  accom- 
panied by  a  corresponding  and  proportional  reduction  in  the  Gov- 
ernment expenses,  brought  about  a  situation  of  exceptional  serious- 
ness. It  is  confidently  expected,  however,  that  once  the  methods 
adopted  for  the  restoring  of  public  confidence  and  meeting  the 
unusual  conditions  which  are  affecting  the  revenues  of  the  country 
will  have  been  given  time  to  work  there  are  better  days  in  store  for 
the  commerce  of  Peru. 

There  is  no  export  duty  on  Peruvian  products,  with  the  exception 
of  that  on  india  rubber  and  gold  bars. 

The  following  figures  give  the  result  of  Peru's  imports  and  exports 
during  the  ten  years  from  1904  to  1913 : 


Years. 

Imports. 

Per  cent. 

Exports. 

Per  cent. 

Total. 

1904                               

$21,  786,  690 

51.72 

$20,  333,  195 

48.28 

$42,119  890 

1905 

21,788,480 

43.08 

28,  786,  750 

56  92 

50  575  235 

1906                      

25,  052,  480 

46.80 

28,479,395 

53.20 

53,  531,  875 

1907 

27,598,755 

49.00 

28,  722,  720 

51.00 

56,321,480 

1908             

26,559,865 

49.23 

27,394,795 

50.77 

53,954,570 

1909                                         

21,493,135 

39.83 

32,463,350 

60.17 

53,  956,  490 

1910 

24.  902,  485 

41  32 

35,370,380 

56  68 

60,  273,  865 

i9ii             : 

27,191,225 

42.29 

37,  110,  135 

57.71 

64,301,365 

1912 

25,701,690 

35.26 

47,  192,  905 

64.74 

72,  894,  600 

1913  

30,443,880 

39.99 

45,688,900 

60.01 

76,  132,  785 

252,  519,  715 

331,  542,  460 

584,062,180 

98257°—  II 


-39 


610  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

The  proportion  of  imports  to  Peru  from  the  United  States  is  28 
per  cent,  and  the  exports  from  Peru  to  this  country  33  per  cent.  The 
increase  in  the  total  of  Peru's  commerce  with  foreign  countries  dur- 
ing the  10  years  mentioned  previously  is  more  than  90  per  cent. 

The  most  important  products  exported  are  copper,  cottons,  sugar, 
petroleum  and  its  derivatives,  silver,  rubber,  wools,  hides,  gold, 
guano,  and  straw  hats. 

The  imports  which  may  be  considered  of  most  importance  are  ma- 
chinery for  agricultural  purposes  and  allied  industries,  coal,  cotton, 
linen,  woolen  and  silk  goods,  corrugated  iron  in  sheets,  pig  iron, 
timber,  wheat,  paper  plain  and  printed. 

The  principal  nations  from  which  Peru  imports  these  articles  are 
Great  Britain,  United  States,  France,  Belgium,  Italy,  Chile,  and 
Germany. 

The  nations  to  which  her  exports  are  principally  consigned  are 
Great  Britain,  United  States,  France,  Belgium,  Chile,  Germany,  and 
Bolivia. 

THE   NATIONAL  TAX   COLLECTING   CO. 

The  collection  of  taxes  in  Peru,  with  the  exception  of  the  salt 
monopoly,  is  farmed  out  to  the  National  Tax  Collecting  Co.,  which 
charges  1  per  cent  on  the  revenue  of  the  branches  it  administers,  6 
per  cent  for  collecting  license  fees  in  Lima  and  Callao,  and  10  per 
cent  for  the  administration  of  the  piers  at  the  ports  of  Tumbes,  Supe, 
and  Chala. 

The  capital  of  this  joint-stock  company  is  $1,500,000. 

During  the  year  1913  this  company  collected  $5,400,855  worth  of 
taxes  on  the  following  products : 

Tax  on  alcohol $1,  736,  220 

Tax  on  sugar 487,040 

Tax  on  matches 174,  670 

Tobacco   monopoly 2,  257,  625 

Opium  monopoly- • 86, 455 

Denatured-alcohol  tax 97,  580 

Municipal  excise  tax 561,  265 


Total $5, 400,  855 

THE   NATIONAL   SALT   CO. 

This  is  another  joint-stock  company  which  controls  all  the  salt 
mines  and  deposits  in  Peru.  It  is  also  a  fiscal  company,  organized 
for  the  purpose  of  obtaining  and  selling  salt.  Prices  are  fixed  by  the 
Government,  the  company  working  on  the  basis  of  a  5  per  cent  com- 
mission. 


MEMORANDUM  BY  PERU.  611 

THE  NATIONAL  DEBT. 

On  the  30th  of  July,  1913,  the  internal  debt  of  Peru  stood  as  fol- 
lows : 

Consolidated  notes,  1  per  cent  interest $13,303,  225 

Redeemable  bonds,  no  interest,  but  with  a  yearly  amortization 
of  $125,000 5,671,050 


$18,  974,  275 

Market  value: 

$13,303,225,  at  14£  per  cent $1,  928,  966 

$5,671,050,  at  10  per  cent 567, 105 


2, 496,  071 

Loan,  1913,  guaranteed  by  the  alcohol  tax,  at  6£  per  cent 1, 000, 000 

Loan,  1914,  same  guarantee,  also  6£  per  cent 1,  000,  000 

Loan  through  the  German  Bank  at  94,  bearing  5£  per  cent  interest, 

guaranteed  by  the  Salt  Monopoly 6,000,000 

Loans  from  local  banks $2,699,000 

Debt  to  Schneider  &  Co.,  of  Paris 1,  255,  000 

Claims  and  special  debts 8,  257,  215 

Local  loan  from  National  Tax  Collecting  Co.,  Lima 6,  225,  000 

18,436,215 


$28,  932, 286 

The  population  of  Peru  being  4,500,000,  the  per  capita  proportion 
is  therefore  about  $6.50. 

BANKS  IN  PERU. 

There  are  at  present  five  banks  which  do  business  in  Peru,  as  fol- 
lows: 

The  Banco  del  Peru  y  Londres Peruvian. 

Banco  Internacional  del  Peru Peruvian. 

Banco  Popular Peruvian. 

Banco  Italiano Italian. 

Banco  Aleman  Transatlantic©,  a  branch  of  the  Deutscher  Bank  of 

Berlin German. 

CAPITAL. 

Banco  del  Peru  y  Londres: 

Paid-up  capital $2,  500, 000 

Reserve  fund , 1,  500,  000 

Banco  Internacional: 

Authorized  capital 2,  500, 000 

Paid-up  capital 500, 000 

Reserve  fund 125,  000 

Banco  Popular: 

Authorized  capital 1,000,000 

Paid-up  capital 750, 000 

Cash  reserve  fund 310, 000 


612 


PAN  AMERICAN   FINANCIAL  CONFERENCE. 


Banco  Italiano: 

Paid-up  capital $1, 000, 000 

Reserve  fund 446,  650 

Sinking  fund 75,  000 

Banco  Aleman  Transatlantic,  for  the  purpose  of  transactions  in 
Peru _ 1, 000, 000 

The  following  was  the  condition  of  the  five  banks  on  December  31, 
1914: 


Banks. 

Demand 
deposits. 

Time 
deposits. 

Advances, 
discounts, 
invest- 
ments. 

Peru  v  Londres  

$3,  680.  165 

$5,896  190 

$13  762  190 

Alem&n                            

2,  151,  985 

3  341  455 

5  4  SO  280 

Italiano 

3  020  705 

2  478  410 

4  063  380 

Popular 

610,  595 

1,099  440 

2  109  125 

International 

234  005 

312  695 

530  830 

$9,697,455 

$13,  128,  190 

$25,945,855 

On  hand. 


Banks. 

Gold. 

Silver  and 
copper. 

Checks. 

In  banks 
in  Lima. 

In  banks 
abroad. 

Peru  y  Londres 

$42,200 

$415,465 

$1  511  345 

$113  360 

$113  365 

Alem&n        .                      

343,  135 

155,040 

1,282,945 

31,990 

382  490 

Italiano 

136,  090 

104,  940 

1,  942,  170 

151  285 

102  780 

Popular      

9,720 

7,700 

582,  655 

118,225 

49  560 

Interaacional 

6,920 

480 

198,  945 

10  395 

6  240 

$538,065 

$683,625 

$5,518,060 

$425,255 

$654,435 

The  Government  does  not  interfere  in  the  fixing  of  the  rate  of 
exchange.  At  the  present  time  drafts  on  London  at  90  d/s  are 
quoted  at  Tj  per  cent  premium  per  Peruvian  pound,  instead  of  one- 
half  to  1  per  cent,  as  is  charged  during  normal  conditions,  owing, 
principally,  to  the  want  of  bottoms  to  carry  products  to  foreign 
markets.  Rates  of  interest  in  Peru  are  stipulated  by  contract. 
When  no  such  stipulation  exists,  a  higher  rate  than  6  per  cent,  which 
is  the  legal  rate,  can  not  be  charged. 

The  guaranties  which  are  required  upon  soliciting  loans  are  (a) 
personal,  (5)  collateral,  and  (c)  mortgages.  Personal  guaranties 
are  the  signature  of  the  borrower  and  those  of  his  guarantors  prom- 
ising to  cancel^his  obligation;  collateral  explains  itself;  and  mort- 
gages require  the  inscription  in  the  real  estate  registers  of  the  loan 
which  is  guaranteed  by  the  mortgage  on  the  property  which  is 
offered  as  security. 

The  time  granted  for  the  fulfillment  of  loans  on  signatures  or  col- 
lateral is  generally  90  days,  which  may  be  extended  on  renewal; 
loans  on  mortgages  are  generally  for  terms  of  from  2  to  21  years, 
loans  being  sometimes  effected  for  more  extended  periods. 


MEMORANDUM  BY  PERU.  613 

There  is  no  bank  authorized  to  issue  notes,  nor  would  permission 
to  issue  such  currency  be  easily  conceded.  At  the  present  time,  for 
the  purpose  of  facilitating  commercial  transactions,  and  due  also  to 
the  withholding  of  gold  coin  consequent  on  the  state  of  war  in 
Europe,  laws  have  been  drafted  authorizing  the  banks  to  issue  bearer 
checks  to  the  amount  of  $12,500,000  under  the  strict  supervision  of 
a  vigilance  committee  formed  for  the  purpose.  This  issue,  to  which 
the  banks  have  subscribed,  is  guaranteed  in  the  following  manner: 
(a)  20  per  cent  in  gold;  (b)  30  per  cent  in  mortgage  bonds,  war- 
rants, etc. ;  (c)  50  per  cent  in  commercial  paper,  listed  on  'change,  as 
well  as  different  stocks  accepted  by  the  committee. 

There  is  no  special  authorization  required  for  the  establishment  of 
a  bank.  According  to  paragraph  11,  article  21,  of  the  Peruvian  Com- 
mercial Code — 

Foreign  associations  which  wish  to  establish  themselves  in  Peru  shall  produce 
and  enter  in  the  register  a  certificate  issued  by  the  Peruvian  consul  that  they 
are  constituted  and  authorized  in  accordance  with  the  laws  of  the  respective 
countries,  in  addition  to  their  constitution  and  the  documents  required  for 
Peruvian  associations. 

And  according  to  article  185  of  the  same  code — 

All  banks  must  have  in  their  vaults  at  least  one-fourth  in  sterling  of  the 
amount  of  their  indebtedness  to  the  public. 

For  the  fulfillment  of  the  legal  obligation  of  inscription  banks 
must  pay  from  one-fourth  to  one-half  per  thousand,  calculated  on 
the  amount  of  the  declared  capital;  and  further,  they,  as  all  other 
industrial  concerns,  are  required  to  pay  to  the  Government  the  right 
to  transact  business  which  is  calculated  at  the  rate  of  5  per  cent  on 
the  net  earnings.  Branches,  when  established,  must  have  a  perma- 
nent representative  body,  according  to  their  statutes,  resident  in  the 
country.  The  branch  of  an  American  bank  would  be  most  favor- 
ably considered  by  the  commerce  of  the  nation.  The  business  of 
exchange  is  generally  conducted  by  banking  institutions  directly  with 
their  clients.  There  is  no  need  of  obtaining  a  special  permit  such 
as  brokers  require  so  as  to  carry  out  such  transactions.  Other  banks 
are  the  Banco  de  Depositos  y  Consignaciones  (Deposits  and  Con- 
signments) ,  which  was  founded  with  a  capital  of  $500,000,  subscribed 
by  the  banks  in  Peru;  this  institution  represents  in  Peru  what  the 
clearing  house  is  to  New  York.  The  daily  transactions  are,  on  an 
average,  $1,000,000.  The  "  Caja  de  Ahorros  de  Lima  "  (Lima  Savings 
Bank)  has  a  capital  of  $100,000,  and  has  over  $1,000,000  in  deposits. 

The  dividends  paid  by  the  banks  in  Lima  in  1913  were  as  follows : 

Per  cent. 

Banco  del  Peru  y  Londres 14 

Banco  Italiano 8 

Banco  Popular : 12 

Banco  Alenian  (no  data  available). 


614  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

CURRENCY. 

During  1914  the  Government  mint  (Casa  Nacional  de  Moneda)  put 
into  circulation  the  following : 

Peruvian  gold  pounds 124, 412 

Peruvian  silver  dollars 1, 143,  527 

The  legal  standard  in  Peru  is  the  Peruvian  gold  pound,  equivalent 
in  value  to  the  British  pound  sterling.  Each  Peruvian  pound  is 
worth  10  silver  dollars  or  "  soles,"  and  each  dollar  or  "  sol "  is  worth 
100  copper  cents  or  "  centavos." 

Gold  currency  being  withheld  during  the  present  crisis,  bearer 
checks  have  of  a  necessity  taken  its  place  in  all  transactions.  These, 
as  has  been  mentioned,  are  guaranteed  in  the  fullest  manner  and 
have  an  equal  redeeming  value  as  the  Peruvian  gold  pound,  which 
is  equivalent  to  $4.8665  American. 

FOREIGN  TRADE. 

An  increased  foreign  trade  with  Latin  America  will  be  attained 
only  in  the  proportion  of  the  permanent  investments  of  American 
capital  which  will  and  can  be  made  in  all  such  non-manufacturing 
countries  as  Peru  whose  trade  is  sought.  Without  such  financial 
assistance,  which  has  hitherto  been  received  from  Europe,  the  im- 
portant purchases  of  American  commodities  are  restricted. 

Unless  this  is  done,  upon  the  cessation  of  hostilities,  when  Europe 
shall  have  once  more  found  her  bearings,  our  markets  will  be  recov- 
ered by  the  nation  which  will  recuperate  quickest  and  resume  its 
former  connections,  as  well  as  that  which  is  financially  strongest 
and  therefore  able  to  help  Latin  American  countries  to  develop  their 
industries  and  markets.  The  mere  manufacturing  of  goods  and  a 
willingness  to  exchange  them  for  cash  in  hand,  or  even  on  reasonable 
terms  of  credit,  are  not  sufficient  to  stimulate  an  increase  of  American 
exports. 

American  financiers  must  help  Latin  American  countries  to  aug- 
ment their  purchasing  power.  This  can  only  be  done  if  America  is 
willing  to  devote  money  to  buying  their  products  and  for  investment 
in  the  extension  of  their  railways,  the  encouragement  of  agricultural 
and  mining  industries,  the  development  of  water-power  enterprises, 
irrigation  works,  and  the  like. 

The  establishment  of  an  American  bank  in  Peru  is  likewise  ur- 
gently required,  since  this  would  facilitate  commercial  transactions 
and  direct  banking  exchange  with  the  United  States.  Without  this 
most  important  condition  there  will'  never  be  any  firm  foundation 
upon  which  to  build  up  the  desired  permanent  commercial  reci- 
procity between  our  countries.  It  is  also  unquestionable  that  the 


MEMORANDUM  BY  PERU.  615 

furtherance  of  these  intentions  would  be  considerably  assisted  by 
the  establishment  of  branches  of  American  commission  houses  and 
manufacturers'  agencies  in  Peru. 

While  upon  this  subject  we  would  further  point  out  the  desirability 
of  establishing  in  Lima  branches  of  different  American  manufac- 
turers whose  output  in  the  United  States  is  insufficient  to  meet  the 
demands  of  South  American  trade  and  which  require  raw  materials 
produced  in  Peru. 

A  brilliant  future  awaits  the  founding  of  agricultural  and  land 
and  real  estate  banks,  the  want  of  which  is  acutely  felt  in  Peru. 
These  would  assist  the  landowner  and  farmer  to  develop  their  hold- 
ings, increase  their  crops,  and  thus  contribute  to  the  gradual  bringing 
under  cultivation  of  the  vast  tracts  of  fertile  land  which  at  present 
lie  fallow  and  unproductive. 

Passing  to  enterprises  of  a  more  ambitious  nature,  we  would  draw 
attention  to  the  possibilities  which  await  the  construction  of  rail- 
ways from  the  coast  to  the  interior  or  Amazon  region,  tapping  the 
unexplored  zones  of  our  Tropics  and  carrying  their  produce  to  the 
sea.  Three  routes  are  under  survey,  the  principal  difficulty  being  the 
matter  of  capital,  which,  from  its  magnitude,  should  appeal  to  North 
American  financiers. 

A  direct  fast  passenger  service,  under  the  American  flag,  from  New 
York  to  Callao,  arranged  so  as  to  avoid  the  quarantine  difficulties, 
which  at  present  cause  so  much  unnecessary  delay  by  the  Panama 
route,  would  prove  of  inestimable  benefit. 

A  considerable  increase  in  the  number  of  communications  would, 
we  are  sure,  attend  the  reduction  in  the  present  cable  rates  to  the  west 
coast,  which  are  too  high  to  allow  of  frequent  use  in  commercial 
and  private  messages,  especially  since  the  difference  in  language 
makes  the  use  of  codes  not  always  possible  in  the  latter  case. 

The  means  of  utilizing  the  high-power  wireless  stations  in  Peru, 
in  conenction  with  those  in  this  country,  for  ordinary  messages  de- 
serves the  attention  of  the  committee. 

Perhaps  the  measure  which  is  of  more  immediate  necessity  is  that 
which  deals  with  the  condition  of  foodstuffs  exported  to  Peru.  It  is 
well  known  that  the  laws  in  the  United  States  governing  this  particu- 
lar matter  are  extremely  strict,  and  very  properly  so,  since  the  health 
of  the  public  is  directly  dependent  upon  their  observance  by  manu- 
facturers. Unfortunately,  such  is  not  the  case  when  the  merchandise 
is  destined  for  export.  We  would  earnestly  draw  the  attention  of  the 
committee  to  the  advisability  of  extending  the  requirements  of  the 
pure-food  laws  to  include  all  foodstuffs  shipped  to  Peru. 

(Signed)  ISAAC  ALZAMORA. 

EDUARDO  HIGGINSON. 


MEMORANDUM  No.  1 

SUBMITTED  BY  THE  DELEGATION  OF 

THE  REPUBLIC  OF  SALVADOR 


617 


MEMORANDUM   PRESENTED   BY     HE   DELEGATION  FROM  THE 
REPUBLIC  OF  SALVADOR. 


FOREWORD. 

If  the  results  of  the  conference  of  the  delegates  from  the  nations 
of  America  gathered  here  are  to  be  practical  and  enduring,  the 
spirit  of  the  conference  should  itself  be  practical.  For  this  it  is  in- 
dispensable that  its  work  be  done  for  the  benefit  of  all,  frankly  and 
cordially  in  the  spirit  of  fraternity. 

"YVe,  in  this  Areopagus,  should  all  regard  ourselves  as  representa- 
tives of  that  great  entity,  America,  pursuing  the  same  objects  of 
civilization  for  the  social  and  commercial  drawing  together  of  all 
its  people.  Only  in  this  way  can  our  labors  be  fruitful. 

The  points  taken  up  herewith,  although  in  the  majority  having 
general  application  for  the  sister  nations,  are  nevertheless  discussed 
in  detail  from  the  point  of  view  of  Salvador. 

COMMERCIAL  CREDIT. 

From  time  immemorial  the  older  nations  have  given  credit  to  the 
younger  nations  with  limited  resources;  the  credit  has  been  ex- 
tended in  different  ways,  but  has  always  been  a  sign  of  prosperity  on 
the  part  of  the  nation  opening  the  door  to  its  capital,  and  permit- 
ting it  to  seek  greater  reward  abroad.  Credit  is  the  power  which 
supports  and  equalizes  fortunes  and  stimulates  saving.  In  antiquity, 
during  her  prosperity,  Athens  advanced  capital  for  commercial  pur- 
poses to  the  countries  of  the  Mediterranean.  In  the  Middle  Ages, 
and  at  the  beginning  of  modern  times,  the  same  facilities  of  credit 
were  utilized  among  the  more  advanced  nations;  the  Dutch  mer- 
chants, in  their  sales  of  merchandise  throughout  Europe,  were  ac- 
customed generally  to  grant  a  year's  time  for  payment. 

In  a  country  the  economic  activity  of  which  is  developing  nor- 
mally the  system  of  cash  payment  in  commercial  transactions,  what- 
ever their  nature,  can  not  be  the  only  way,  nor  indeed,  the  principal 
way,  of  buying.  Cash  purchase  demands  readiness  of  capital,  and 
such  an  organization  of  business  is  only  understood  among  primitive 
peoples. 

619 


620  PAN  AMERICAN  FINANCIAL  CONFEEENCE. 

A  commercial  entity's  power  of  enlarging  its  possessions  ought 
not  to  be  limited  to  the  capital  represented  by  cash,  but  it  should 
include  the  whole  of  its  material  and  moral  inheritance;  that  is  to 
say,  both  the  material  values  and  the  immaterial  values  which  are 
the  most  precious — professional  skill  and  honor.  Cash  sales  and 
transactions  are  limited  in  the  world  of  modern  business  to  direct 
relations  with  the  consumer. 

It  will  not  be  possible  to  extend,  nor  even  to  preserve,  the  present 
commerce  of  the  United  States  with  Salvador — and  it  is  certain  that 
the  same  may  be  said  with  respect  to  the  other  Latin-American 
countries — if  the  merchants,  manufacturers,  commission  dealers, 
and  business  men  of  the  United  States,  do  not  open  extensive  credits, 
in  order  to  make  all  these  countries  valuable  and  important  clients, 
seeing  that  they  possess  the  natural  resources  adequate  to  such  re- 
sult. At  present,  the  paralysis  of  long-term  business  with  the  Euro- 
pean nations  has  caused  profound  confusion  in  the  commerce  and 
agriculture  of  our  countries,  and  by  reaction,  likewise  serious  dis- 
turbances in  the  national  budgets.  Since  there  are  no  reasons  that 
could  cause  capital  and  the  value  of  city  and  rural  properties  to 
diminish,  and  since  all  commercial  institutions  remain  on  a  normal 
basis,  and  since  the  elements  of  production  of  our  countries  are  sound, 
it  would  be  a  lack  of  foresight  and  of  financial  policy  on  the  part  of 
the  United  States  not  to  take  advantage  of  these  historic  moments 
to  assist  our  countries  without  greater  distress  to  pass  through  this 
crisis,  which  has  no  origin  at  home ;  we  repeat,  that  it  would  be  an 
error  without  justification  on  the  part  of  a  rich  nation,  possessing  so 
many  resources  of  every  sort. 

It  is  for  the  illustrious  congress  here  assembled  to  seek  the  best 
means  for  extension  of  credit,  as  credit  will  be  the  salvation  of  the 
American  countries  in  this  crisis,  and  with  the  help  of  the  Govern- 
ment of  the  United  States  this  task  will  be  lighter. 

COMMERCIAL.  TREATIES. 

A  commercial  treaty  between  the  United  States  and  Salvador  can 
not  be  based  on  the  so-called  exclusive  principle;  it  can  be  possible 
only  in  case  the  United  States  were  to  offer  compensation  for  the 
advantages  that  we  are  willing  to  offer  to  American  goods  in  our 
customs  rates ;  because,  if  we  were  to  concede  to  American  goods  with- 
out compensation  such  advantages  as  we  extend  to  certain  French 
goods  by  virtue  of  the  treaty  Zaldivar-Delcasse  of  1901,  we  would 
lose  a  great  part  of  our  customs  income.  France  has  two  tariff  rates 
for  imported  foreign  articles  and  grants  us  the  lower  one  for  our 
chief  products,  such  as  coffee,  which  pays  only  136  francs  per  100 
kilos.  By  virtue  of  this  treaty  there  are  36  French  articles  enjoying 


MEMORANDUM   NO.   1  BY  REPUBLIC   OF  SALVADOR.  621 

preferential  rights,  and  22  articles  of  Salvador  granted  the  lower 
French  tariff  rate.* 

In  view  of  the  foregoing  information  our  problem  is,  What  will 
the  United  States  offer  us  in  compensation  for  the  concessions  which 
we  are  willing  to  grant  them  ? 

MONETARY   SYSTEM. 

The  first  function  of  money  consists  in  measuring  values,  just  as 
the  meter  measures  lengths  and  the  kilo  weights.  The  establishment 
•of  money  on  a  scientific  basis  constitutes  one  of  the  great  elements 
of  progress  of  the  human  mind,  and  age-long  experience,  as  well  as 
reason,  demonstrates  that  coined  money  is  merchandise  with  a  value 
depending  directly  on  the  quantity  of  precious  metal  that  it  con- 
tains. History  gives  abundant  proof  that  legal  regulation  is  not 
enough  to  assign  a  value  to  a  given  coin  and  keep  it  fixed. 

It  is  evident  that  in  the  majority  of  the  Latin- American  nations 
one  of  the  most  serious  problems  that  must  be  solved  if  their  economic 
conditions  are  to  be  improved  is  that  of  currency.  The  diversity 
of  intrinsic  and  face  values,  as  well  as  the  multiplicity  of  systems, 
makes  commercial  transactions  even  between  neighboring  countries 
almost  impossible,  except  by  taking  as  a  standard  the  currency  of 
the  United  States  or  that  of  the  great  European  nations.  Money 
is  principally  an  instrument  of  comparison,  evaluation,  and  enumera- 
tion ;  or,  in  other  words,  a  common  denominator.  It  is  from  this 
point  of  view  that  it  has  been  given  the  name  of  "  measure  of  value," 
or  "  valorimeter."  We  believe  that  the  adoption  of  a  single  monetary 
system,  established  on  the  uniform  basis  of  a  single  gold  standard 
coin,  is  one  of  the  greatest  steps  for  the  drawing  together  of  the 
21  American  Republics.  Before  any  new  system  can  be  comfortably 
accepted  it  has  to  be  tested  practically.  We  believe,  therefore,  that 
a  system  long  known  and  notably  sound  during  many  years  would 
be  preferable.  The  representatives  of  Salvador  would  suggest  the 
general  adoption  of  the  currency  of  the  United  States  by  our  21 
nations.  The  Government  of  the  United  States  could  mint  a  coin 
with  the  date  of  1916  to  the  amount  from  $350,000,000  to  $400,000,000 

*  Our  exportations  of  coffee  to  France  during  the  last  10  years  have  been  as  follows : 


Kilos  (net). 

1905 10,  282,  934 

1906 10,  302,  691 

1907 6,  428,  264 

1908 8/217,  262 

1909 10,  143,  126 


Kilos  (net). 

1910 5,  408,  761 

1911 9,  207,  073 

1912 _• 5,  113,  356 

1913 6,  419,  723 

1914 5,  905,  665 


which  leaves  an  annual  average  of  7,742,885  net  kilos  of  coffee,  without  counting  also 
considerable  quantities  of  indigo,  balsam,  and  rubber,  which  likewise  enjoy  the  lower 
rates. 


622  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

that  could  be  distributed  among  the  twenty  Latin- American  Ee- 
publics  in  the  proportion  of  $5  per  capita.  This  amount  would  bfe 
paid  by  the  respective  Governments  to  the  United  States  with  the 
different  stocks  of  money  now  existing  in  each  country,  and  the 
differences  that  might  occur  would  be  paid  within  a  reasonable  time. 

On  the  1st  of  April,  1912,  the  principal  and  secondary  monetary 
circulation  in  the  United  States  was  $808,410,000,  or  $8.48  per  capita, 
and  the  note  circulation  was,  during  the  same  period,  $2,472,774,000, 
or  $25.97  per  capita.  As  will  be  seen,  the  proportion  of  $5  per  capita 
of  money  that  we  have  taken  as  a  basis  for  Latin  America  is  suffi- 
cient ;  but  we  might  very  well  be  able  to  vary  these  figures,  augment- 
ing or  diminishing  the  quota  for  each  country,  in  proportion,  not 
alone  taking  into  account  the  number  of  inhabitants,  but  also  its 
relative  wealth  and  commerce. 

The  adoption  of  the  currency  of  the  United  States  as  the  legal 
currency  in  all  independent  America  might  be  established  the  1st  of 
January,  1916. 

LOANS  TO  SALVADOR. 

The  entrance  of  capital  into  new  and  undeveloped  countries  is  a 
continually  recurring  phenomenon  that  will  never  entirely  disap- 
pear, in  spite  of  the  spread  of  civilization  over  the  earth,  because 
the  different  peoples  are  differently  endowed  with  the  genius  of 
saving,  and  because  different  countries  offer  different  openings  for 
the  investment  of  foreign  capital.  In  new  countries  the  national 
capital  is  not  sufficient  for  the  immense  task  of  commercial  and 
economic  development,  and  it  is,  besides,  timid  and  distrustful.  At 
the  present  moment  we  do  not  think  it  practicable  to  look  to  the 
American  money  market  for  favorable  conditions  in  a  loan,  on  ac- 
count of  the  excellent  opportunity  that  is  offered  the  money  markets 
of  the  world,  especially  the  American  markets,  as  a  result  of  condi- 
tions in  Europe. 

POSTAL  TARIFFS. 

A  uniform  intercontinental  postal  tariff  of  2  cents  (gold)  for 
letters  and  1  cent  (gold)  for  printed  matter  and  post  cards,  and  the 
establishment  of  rapid  and  reliable  service,  would  also  be  an  element 
of  a  commercial  and  social  drawing  together  of  all  the  independent 
nations  of  America.  We  believe  that  the  small  sacrifice  this  would 
entail  upon  the.  treasury  of  the  respective  countries  would  be  in- 
significant compared  with  the  benefits  that  would  result  from  the 
more  intimate  acquaintance  with  one  another's  resources  and  the 
broadening  of  commercial  relations  consequent  upon  such  an  agree- 
ment. 


MEMOKANDUM   NO.   1  BY  EEPUBLIC   OF  SALVADOK.  623 

WEIGHTS  AND   MEASURES. 

Weights  and  measures  being  one  of  the  indispensable  factors  of 
commerce,  it  is  natural  that  if  the  contracting  parties  have  the  same 
simple  and  practical  system,  it  facilitates  their  calculations  and  trans- 
actions. The  metric  decimal  system  is  the  simplest  and  most  scien- 
tific for  all  calculations;  its  adoption  by  all  the  nations  of  America 
would  mean  a  great  step  toward  commercial  intimacy. 

TRANSPORTATION. 

The  essential  elements  for  development  of  import  and  export  trade 
are  low  customs  rates  and  rapid  and  secure  communication,  in  order 
to  carry  American  goods  to  our  country  and  our  products  to  the 
United  States.  We  all  know  that  transportation  between  this  coun- 
try and  the  southern  Republics  is  insecure,  expensive,  and  inadequate. 
The  United  States,  which  is  right  at  our  doors,  should  give  us  better 
means  of  communication  than  those  we  have  with  distant  Europe. 
It  is  essential  that  the  United  States  permit  their  ships  bound  from 
their  Atlantic  to  their  Pacific  ports  to  touch  at  our  harbors,  that 
we  might  have  more  choice  of  ships  for  travel  or  freight.  The 
Government  of  Salvador  will  make  special  concessions  to  foreign 
steamers  stopping  at  our  ports  regularly  and  frequently;  it  would 
not  only  not  charge  port  duties,  etc.,  but  it  would  even  subsidize 
such  a  company,  according  to  the  importance  and  number  of  ships. 

PARCEL  POST. 

The  establishment  of  an  intercontinental  service  for  [parcels  not  over 
5  kilos  in  weight  nor  more  than  50  cubic  centimeters  in  volume,  at  a  dol- 
lar rate,  would  facilitate  many  small  transactions,  themselves  the  fore- 
runners of  more  important  orders.  If  we  had  more  facilities  for 
orders  and  for  payments,  a  number  of  articles  that  have  been  com- 
ing from  Europe  to  Salvador  by  parcels  post  could  be  sent  from  the 
United  States.  A  system  of  parcels  interchange  between  the  coun- 
tries of  Latin  America  would  also  be  very  advantageous.  For  ex- 
ample, there  could  be  sent  to  the  various  Central  or  South  American 
countries  jipi-japa  hats  from  Ecuador,  perrajes  from  Guatemala, 
tiste  or  pinol  from  Nicaragua,  and  yerba  mate  from  Paraguay, 
cigars  from  Cuba  and  Mexico,  etc.  To-day  we  are  separated  from 
each  other  less  by  distance  than  by  vague  knowledge  of  the  natural 
and  industrial  resources  and  productive  powers  of  our  Latin- Ameri- 
can brothers. 


624  PAN  AMERICAN   FINANCIAL  CONFERENCE. 

METHODS  OF  PACKING. 

One  of  the  complaints  that  our  merchants  make  against  American 
trade  is  the  slack  and  careless  way  of  packing.  Much  merchandise 
reaches  us  in  bad  condition  at  substantial  loss  to  us.  Especial  com- 
plaint is  made  in  this  regard  of  parcels  sent  by  mail.  It  is  to  be 
wished  that  this  point  be  considered  in  such  a  way  that  through 
the  Department  of  Commerce  a  better  method  of  packing  be  adopted 
by  manufacturers  and  jobbers,  so  as  to  avoid  notable  losses  to  our 
merchants. 

AMERICAN  BANKS. 

Before  mutually  advantageous  business  operations  can  be  under- 
taken extensively  by  Americans  in  Salvador  and  the  other  Latin- 
American  countries,  we  must  find  that  element  which  generates  the 
power  that  alone  can  realize  those  operations  successfully.  This 
power  we  call  credit,  and  credit  can  proceed  only  from  a  banking 
establishment  with  capital  sufficient  for  the  needs  of  these  countries. 

A  bank  founded  with  sufficient  capital,  and  operating  on  a  basis 
of  liberal  credit  for  commerce  and  of  long-time  credit  at  moderate 
interest  for  agriculture,  would  be  the  best  instrument  to  develop 
commercial  relations  between  the  United  States  and  our  countries, 
as  well  as  the  best  source  of  information  for  all  enterprises  desirous 
of  establishing  themselves  among  us. 

So  far  as  Salvador  is  concerned  we  may  say  that  the  foundation 
of  a  bank  with  a  capital  of  $10,000,000  and  with  a  liberal  credit 
policy  would  transform  Salvador  in  a  few  years  into  an  important 
commercial,  industrial,  and  agricultural  organism.  We  feel  that  a 
banking  establishment  in  our  country  would  be  certain  of  substan- 
tial success.  Like  all  the  other  Latin- American  Republics,  Salvador 
possesses  untouched  wealth,  and,  like  them,  her  agriculture  is  still 
in  a  primitive  state  for  lack  of  capital  that  might  permit  the  under- 
taking of  improvements  on  a  large  scale.  As  for  industries,  it  may 
be  said  that  they  do  not  exist.  Our  Government  is  willing  to  offer 
all  requisite  facilities  and  privileges  in  everything  purely  of  an 
economic  and  industrial  character. 

GENERAL  RECOMMENDATIONS. 

In  conclusion,  the  delegation  of  Salvador  respectfully  proposes 
the  following  general  resolutions: 

First.  That  American  manufacturers  and  merchants  be  recom- 
mended to  try  in  every  way  possible  to  satisfy  the  tastes  and  re- 
quirements of  Latin- American  commerce  and  consumers ;  to  improve 


MEMORANDUM   NO.   1  BY  REPUBLIC   OF   SALVADOR.  625 

methods  of  packing  their  merchandise,  and  to  concede  reasonable 
credits  and  terms. 

Second.  That  the  foundation  of  American  branch  banks  be  under- 
taken with  the  support  of  the  respective  Governments,  and  by 
means  of  these  branches  that  the  attempt  be  made  to  introduce  the 
monetary  system  of  the  United  States  in  all  the  American  Republics 
as  the  most  stable  basis  for  Pan  American  trade. 

Third.  That  the  Governments  of  America  be  recommended  to 
except  from  every  tax  the  merchant  ships  of  the  other  Republics, 
giving  them  the  same  treatment  that  they  give  their  own  ships,  so 
as  to  create  an  inter- American  coastwise  trade. 

(Signed)  ALFONSO  QUINONEZ  M. 

JOSE  E.  SUAY. 
ROBERTO  AGUILAR. 
98257°— 15 40 


MEMORANDUM  No.  2 
SUBMITTED  BY  THE  DELEGATION 
OF  THE  REPUBLIC  OF  SALVADOR 
ANSWERING  THE  QUESTIONS  SUG- 
GESTED BY  THE  SECRETARY 
OF  THE  TREASURY 


627 


MEMORANDUM  NO.  2,  SUBMITTED  BY  THE  DELEGATION  OP  THE 
REPUBLIC  OF  SAN  SALVADOR,  ANSWERING  THE  QUESTIONS 
SUGGESTED  BY  THE  SECRETARY  OF  THE  TREASURY. 

I.    PUBLIC  FINANCES. 

The  European  war,  causing  world-wide  economic  disturbances,  has 
had  a  rather  severe  effect  in  Salvador.  Our  principal  source  of 
national  income  is  the  customs  tariff,  and  that  naturally  is  what  has 
suffered  most,  not  only  because  of  the  external  troubles,  but  also  on 
account  of  the  lack  of  many  products  of  the  belligerent  countries 
no  longer  to  be  had.  Likewise  we  were  affected  by  the  shrinkage  of 
credit  due  to  internal  conditions  consequent  upon  the  war,  such  as 
the  scarcity  of  drafts  for  foreign  payments  and  the  high  rates  of 
exchange. 

The  import  revenues  of  1913  amounted  to -$7,263,042.98  and  of 
1914  to  $6,076,770.61,  showing  a  loss  of  $1,186,272.37  (silver  dollars— 
$0.40  gold  U.S.). 

But  in  the  year  1914  there  were  only  three  abnormal  months  in 
which  the  consequences  of  the  war  made  themselves  felt.  Consider- 
ing the  percentages  of  these  revenues  from  October,  1914,  to  March, 
1915,  the  reduction  is  one  of  more  or  less  than  40  per  cent.  On  this 
account  in  the  budget  prepared  by  the  Government  in  the  month  of 
April  for  the  fiscal  year  beginning  July  1,  the  income  from  import 
taxes  has  been  calculated  more  or  less  on  this  basis. 

The  export  tax  had  an  increase  during  the  past  year  of  $296,533.09 
over  1913  because  of  the  export  of  130,000  quintals  more  of  coffee 
and  an  increase  of  gold  and  silver  exportations.  The  other  internal 
sources  of  income  fell  off  slightly,  except  that  of  alcohol,  which 
suffered  a  loss  of  $281,508.77,  or  10.75  per  cent  over  the  preceding 
year. 

Considering  the  percentage  of  the  months  already  affected  by  the 
war  and  taking  account  of  all  probable  contingencies — internal  and 
foreign — the  Government  has  calculated  its  income  for  the  budget 
of  the  next  fiscal  year  as  $10,800,000  (1913,  $13,734,133.46,  and  1914, 
$12,423,752.88,  showing  a  loss  of  $1,310,381.88).  Public  expenditures 
in  1913  were  $11,686,577.19 ;  in  1914,  $11,311,623.31.  In  the  foregoing 
figures  none  of  the  sums  have  been  included  which  were  turned  over 
to  the  Sinking  Fund  Commission  (Cartera  de  Credito  Publico)  for 
interest  and  amortization  of  foreign  and  internal  obligations. 

Immediately  after  the  beginning  of  the  war  the  Government  took 
certain  measures  to  deal  with  the  fiscal  situation  by  reducing  ex- 
penses so  far  as  possible  without  interfering  with  the  administrative 

629 


630  PAN  AMERICAN   FINANCIAL  CONFERENCE. 

requirements  and  needs  of  the  country,  by  reducing  the  number  of 
employees,  by  discontinuing  public  works  in  part,  and  by  reducing 
the  number  of  assistants  in  the  consular  service.  The  result  was  a 
reduction  in  expenses  of  $374,953.88  (excluding  that  devoted  to  the 
debt— 1913,  $11,686,577.19,  and  1914,  $11,311,628.31). 

August  11,  1914,  an  agreement  was  made  with  the  bankers  of  the 
country  whereby  the  Government  might  avail  itself  of  a  credit  of 
$4,000,000,  at  5  per  cent,  which  it  was  to  commence  to  repay  a  year 
after  the  signing  of  peace  in  Europe.  In  April  the  Government 
and  the  banks  made  a  new  agreement,  according  to  which  the  Gov- 
ernment should  no  longer  use  this  credit,  releasing  it  for  commerce 
and  agriculture.  In  those  eight  months  some  $2,600,000  of  this 
account  had  been  used  by  the  Government. 

In  March  the  Government,  wishing  to  release  the  banks  from 
their  obligation  to  afford  the  above-mentioned  credit,  saw  itself 
obliged  to  suspend  payments  on  the  internal  debt,  to  which  pro- 
cedure the  creditors  consented.  The  14th  coupon  of  the  Eng- 
lish loan  of  1908,  due  February  15,  1915,  and  amounting  to  £43,005, 
was  paid  when  due.  We  believe  that  the  Government  is  taking  the 
necessary  steps  to  pay  the  15th  coupon  (due  Aug.  15). 

The  Government  has  submitted  to  the  National  Assembly  vari- 
ous projects  arrived  at  dealing  with  the  situation,  and  balancing  the 
budget  of  the  next  fiscal  year.  The  chief  project  is  one  of  a  general 
income  tax,  wherewith  the  Government  proposes  to  reform  com- 
pletely our  economic  system,  and  even  though  its  effect  will  not  be 
immediate,  it  is  destined  to  replace,  little  by  little,  the  tax  on  liquors 
and  tariff  rates.  A  tariff-reform  bill  was  submitted  lately,  likewise 
with  the  idea  of  simplifying  the  customs  fiscal  system  by  keeping 
only  the  gold  standard  and  suppressing  the  existing  taxes,  numer- 
ous and  obstructive  in  character. 

As  to  questions  of  cooperation  see  the  general  memorandum  pre- 
sented by  our  delegation,  which  treats  of  the  cooperation  of  the 
United  States  with  us  in  our  business  affairs. 

II.    THE   MONETARY   SITUATION. 

Before  the  world  crisis,  the  monetary  situation  of  Salvador  was 
good,  since  the  banks  had  introduced  large  amounts  of  coin,  unitary 
and  fractional,  at  the  beginning  of  1914,  at  the  time  of  and  because 
of  the  failure  of  the  so-called  Banco  Nacional  (which  has  no  connec- 
tion whatever  with  the  Government),  so  that  the  (metallic)  cash 
balances  of  the  other  three  banks  still  operating  June  30,  1914  (a 
month  before  the  war  began) ,  was  $4,514,773.62.  In  addition  to  this, 
$3,000,000  had  been  drawn  by  the  public  from  the  banks  in  Novem- 
ber, 1913,  on  account  of  the  panic  due  to  the  failure  of  the  so-called 


MEMORANDUM    NO.    2  BY  REPUBLIC   OP   SALVADOR.  €31 

Banco  Nacional.  The  situation  was  all  the  more  satisfactory  in  that, 
according  to  bank  statement  of  June,  1914,  the  note  circulation  of 
the  three  banks  was  only  one  of  $3,498,329,  showing  a  cash  reserve 
of  $1.29  in  silver  for  every  dollar  in  note  circulation. 

According  to  bank  statement  of  December  31,  1914,  the  situation 
was:  Silver  cash  balance  of  banks,  $3,664,937.74;  note  circulation, 
$6,062,601 ;  that  is  to  say,  a  reserve  of  60  cents  on  the  dollar,  a  reserve 
quite  legal  and  adequate. 

It  is  entirely  evident  from  experience  that  our  supply  of  metallic 
currency  is  insufficient  for  the  needs  of  commerce  and  agriculture. 

As  a  matter  of  fact,  the  capital  of  the  three  banks  now  doing  busi- 
ness is  $6,000,000.  They  may  issue  double  their  capital  in  notes,  ac- 
cording to  their  concessions,  on  condition  of  having  on  hand  40  per 
cent  (Banco  Occidental  and  Agricola  Comercial)  or  50  per  cent 
(Banco  Salvadoreno) . 

As  may  be  seen,  the  total  of  the  circulating  coin  and  credit  money 
of  the  banks  amounts  only  to  $10,000,000,  to  which  we  may  add  the 
$3,000,000  in  fractional  currency  in  the  public's  hands.  Calculating 
the  population  at  1,200,000,  we  have,  then,  only  $11  per  capita,  a 
quantity  entirely  insufficient,  especially  when  it  is  realized  that  opera- 
tions by  check,  indorsement,  or  transfer  very  rarely  occur. 

We  gave  in  our  memorandum  our  suggestion  for  the  adoption  of 
the  currency  of  the  United  States  as  the  legal  and  uniform  currency 
of  Latin- America.  If  this  be  not  practicable,  our  Government  will 
continue  to  seek  a  method  of  giving  our  silver  standard  coins  a  fixed 
gold  value  by  means  of  a  conversion  fund  as  a  preliminary  step 
toward  the  establishment  of  the  gold  standard. 

III.  THE  PRESENT  BANKING  SITUATION. 

The  banking  situation  is  good,  but  as  the  capital  of  the  banks  is 
very  limited — not  sufficient  for  the  necessities  of  the  country — every 
business  transaction  is  made  difficult.  Consequently,  when  the  Euro- 
pean crisis  occurred,  and  the  merchant  and  the  farmer  needed  more 
credit  for  their  business  and  for  their  crops  since  their  European 
credit,  needless  to  say,  was  cut  off — the  banks,  in  turn,  cut  some 
credits  off  entirely,  and  reduced  others.  On  the  other  hand,  the 
Government  also  had  to  have  recourse  to  the  banks  in  order  to  face 
the  difficulties  arising  in  the  budget  as  a  consequence  of  the  reduc- 
tion of  governmental  revenues.  Nevertheless,  examining  the  stand- 
ing of  the  three  banks,  we  may  say  that  these  institutions  are  solid 
and  sound,  so  far  as  their  own  situation — that  is  to  say,  from  the 
point  of  view  of  the  stockholders — is  concerned;  but,  viewing  their 
situation  so  far  as  concerns  general  interests  and  the  normal  devel- 


632  PAN  AMERICAN   FINANCIAL  CONFERENCE. 

opment  of  the  country,  we  come  to  the  conclusion  that  the  banks  now 
established  in  Salvador  do  not  meet  the  needs  of  the  day,  and  the 
whole  nation  loudly  demands  the  establishment  of  a  new  bank, 
organized  with  necessary  resources  on  the  principles  which  regulate 
similar  institutions  in  the  most  progressive  countries  of  to-day. 

Here  we  can  only  repeat  that  for  the  development  of  the  com- 
merce of  the  United  States  in  our  country  the  establishment  of  a 
new  bank  there  is  not  only  desirable  but  necessary  and  fitting,  be- 
cause the  most  important  interests  of  Salvador,  as  well  as  American 
interests  there  now,  would  combine  for  substantial  success. 

IV.  THE  FINANCING  OF  PUBLIC  IMPROVEMENTS 

and 

V.  THE  FINANCING  OF   PRIVATE   ENTERPRISES. 

There  are  many  public  works  of  great  importance  to  be  carried 
out  in  Salvador,  either  by  the  Federal  or  municipal  authorities  or 
by  private  corporations. 

Of  these  proposed  public  works  the  principal  are  the  paving  and 
establishing  of  sewage  systems  in  the  cities  of  San  Salvador  and 
Santa  Ana.  The  first  of  these  projects  was  attempted  over  two  years 
ago,  but  was  never  finished  through  lack  of  funds.  The  Government, 
the  municipalities,  and  public  utilities  commission  of  San  Salvador 
should  jointly  guarantee  the  financing  of  these  enterprises. 

Another  work  of  great  importance,  as  much  because  of  its  influ- 
ence on  the  development  of  the  country  as  because  of  the  amount  of 
capital  required,  is  the  construction  of  the  railroad  from  the  port  of 
La  Libertad  to  the  capital,  a  distance  of  about  50  kilometers. 

A  concession  has  already  been  granted  for  the  construction  of  this 
line  at  Government  expense,  but  the  war  has  come  and  the  enterprise 
can  not  be  carried  through,  due  to  lack  of  funds. 

Various  other  enterprises  could  be  undertaken,  for  which  the  Gov- 
ernment could  give  ample  guaranties,  particularly  in  the  case  of 
those  which  might  be  municipal,  by  a  system  of  special  taxation 
which  would  adequately  cover  the  economic  side  of  the  work. 

In  our  national  budget  there  is  always  an  item  called  public  credit, 
which  has  varied  in  the  last  few  years  from  $3,000,000  to  $4,000,000, 
for  the  amortization  of  the  English  loan  and  of  the  domestic  loan 
and  for  the  payment  of  the  respective  interests  involved. 

The  amount  of  money  required  to  meet  these  loans  is  so  great  as 
to  throw  our  budget  out  of  balance,  inasmuch  as  almost  30  per  cent  of 
the  total  public  revenue  is  involved  in  the  same. 

I  have  stated  in  a  previous  paragraph  that,  because  of  the  war, 
the  Government  has  been  obliged  to  suspend  payment  on  the  domestic 


MEMORANDUM   NO.   2  BY  REPUBLIC   OF  SALVADOR.  633 

loan,  but  the  fourteenth  coupon  of  the  English  loan  was  paid  upon 
maturity,  February  15  of  the  current  year. 

Various  bills  have  been  presented  to  the  National  Assembly  in  the 
current  year  designed  to  increase  our  public  revenue  and  to  perfect 
its  collection. 

The  principal  of  these  bills  is  that  proposing  a  general  tax  on 
revenue,  which,  although  not  capable  of  immediate  application,  will 
nevertheless  serve  as  point  of  departure  for  general  reform  in  our 
fiscal  system,  now  so  deficient  and  obsolete. 

In  regard  to  private  enterprises,  there  are  a  great  many  companies 
and  concerns  which  can  not  operate,  due  to  lack  of  necessary  capital. 
There  are  a  number  of  waterfalls  which  could  generate  electricity 
and  power  and  thereby  give  life  to  many  an  enterprise,  all  of  which 
have,  no  doubt,  been  prevented  from  being  put  to  practical  use  for 
the  reason  adverted  to  above,  viz,  lack  of  capital. 

The  Government  on  its  part  stands  ready  to  facilitate  in  every  way 
the  introduction  of  American  capital  into  the  enterprises  of  the 
country  and  to  make  the  necessary  reform  in  legislation  that  will 
assure  the  creditor  that  the  guarantees  required  will  have  the  sanction 
and  will  be  in  accord  with  the  principles  of  modern  legislation  in 
vogue  among  the  most  advanced  nations. 

All  that  has  been  referred  to  in  this  paragraph  may  be  applied  to 
agriculture ;  for  although  it  is  true  that  our  farmers  are  making  great 
efforts  to  better  the  crop  and  to  produce  more  from  the  soil,  neverthe- 
less all  their  efforts  are  handicapped  through  lack  of  capital  to 
operate  on  a  large  scale,  and  thus  the  development  is  very  slow  and 
progress  insignificant,  whereas  with  sufficient  capital  and  under 
favorable  conditions  our  farmers  could  devote  themselves  to  enter- 
prises on  a  large  scale ;  the  completion  of  which  would  involve  several 
years. 

VI.    THE  EXTENSION   OF  INTER-AMERICAN   MARKETS. 

The  base  for  the  extension  of  the  Pan  American  markets,  as  I 
have  stated  in  our  memorandum,  is  credit,  but  in  sufficient  scale — 
that  is,  from  3  to  12  months — because  this  is  the  inconvenience  which 
all  our  farmers  and  business  men  meet  when  they  try  to  enlarge 
their  transactions  with  the  United  States.  There  are  persons  in 
Salvador  who  are  waiting  for  the  war  to  be  over  in  order  to  establish 
new  relations  with  Europe,  because  the  markets  of  the  United 
States  are  closed  to  them  for  the  reason  that  they  will  not  give  credit. 

To  facilitate  acceptances  and  discounts  the  establishment  of  Ameri- 
can banking  houses  would  be  the  best  agent,  and,  although  it  is  true 
that  now,  as  well  as  formerly,  they  have  handled  international  trans- 


634  PAN  AMERICAN   FINANCIAL  CONFERENCE. 

actions,  it  has  been  only  on  a  very  small  scale  and  with  some  diffi- 
culty, because  our  institutions  have  not  all  the  money  required  and 
they  lack  the  necessary  credit  avenues  abroad. 

In  our  memorandum  we  proposed  the  adoption  of  the  United 
States  system  of  currency  for  all  America.  If  this  is  not  done,  El 
Salvador  can,  by  special  and  private  arrangement  with  the  United 
States,  adopt  the  currency  of  the  latter.  For  this,  however,  a  bank- 
ing institution  is  needed  with  capital  to  supply  the  Republic  with  an 
adequate  stock  of  money  for  the  replacement  of  the  currency  now  in 
use,  and  the  furtherance  of  other  Government  reforms.  This  would 
give  us  financial  strength  and  relieve  us  of  the  onerous  burden  of 
exchange,  which  involves  such  a  sacrifice  of  our  national  resources. 

(Signed)  ALFONSO  QTJINONEZ  M. 

JOSE  E.  SUAY. 

ROBERTO  AGUILAR. 


MEMORANDUM  OF  SUGGESTED  TOPICS  FOR 

CONSIDERATION  OF   THE  CONFERENCE, 

SUBMITTED  BY  THE  DELEGATION  OF 

THE  REPUBLIC  OF  URUGUAY 


635 


MEMORANDUM  OF  SUGGESTED  TOPICS  FOE  CONSIDERATION  OF 
THE  CONFERENCE,  SUBMITTED  BY  THE  DELEGATION  OF  THE 
REPUBLIC  OF  URUGUAY. 


I.  Maritime  transportation. 

II.  System  of  weights  and  measures. 

III.  Communication  by  cable — how  to  render  it  more  economical. 

IV.  Monetary  unity,  exchanges,  and  arbitrages. 

V.  American  banks. 

VI.  Commercial  credit — Sales  on  time. 

VII.  Postal  Union — Adhesion  of  the  North  American  countries 
to  the  South  American  Postal  Union  in  order  to  facilitate  and 
cheapen  mail  service. 

VIII.  Facilities  through  customs  and  in  other  ways  for  commercial 
interchange  between  American  countries. 

IX.  Interchange  of  students  in  the  higher  business  schools  be- 
tween the  American  countries  and  establishment  of  mercantile  mu- 
seums in  such  schools. 

X.  Necessity  of  diminishing  imposts  on  the  necessaries  of  life 
and  of  increasing  those  upon  other  articles.    Laws  for  progressive 
taxes  on  inheritances  and  adoption  of  international  measures  with  a 
view  to  avoiding  fraud. 

637 


MEMORANDUM  ON  THE  EFFECTS  OF  THE  EURO- 
PEAN WAR  SUBMITTED  BY  THE  DELEGATION 
OF  THE  REPUBLIC  OF  URUGUAY 


639 


EFFECTS  OF  THE  EUROPEAN  WAR  IN  URUGUAY. 


I.    FlRST  MEASURES  TAKEN. 

At  the  outbreak  of  the  war  international  commerce  was  disturbed 
by  reason  of  the  reaction  of  the  measures  adopted  by  all  countries 
upon  maritime  transportations,  banking  credits,  imports,  and  ex- 
ports. 

As  the  parties  most  affected  by  the  panic  were  the  people  who  had 
deposited  funds  in  the  banks  and  the  holders  of  bonds,  the  Govern- 
ment of  Uruguay  issued  a  decree  on  the  2d  of  August  prescribing : 

1.  The  closing  of  banks  and  stock  exchange  for  one  week. 

2.  Extension  of  the  time  when  commercial  and  banking  paper 
became  due  until  the  opening  of  the  banks. 

3.  Extension  for  the  same  time  of  customs  duties  due. 

II.  GENERAL  MEASURES  or  AN  ECONOMIC  NATURE. 

On  August  8  the  executive  power  introduced  a  bill,  which  was  ap- 
proved, that  established  temporary  banking  regulations,  in  order  to 
prevent  the  withdrawal  of  deposits  from  private  banks  and  the  con- 
version of  bills  at  the  Bank  of  the  Republic.  This  law  prescribed : 

1.  That  the  "Banco  de  la  Republica"  (State  bank)  was  author- 
ized to  abstain  from  converting  its  bills  for  a  period  of  six  months, 
which  was  later  extended  to  a  period  of  three  months  after  the 
termination  of  the  European  war,  but  limiting  the  issuance  of  bills 
to  the  normal  proportions  stipulated  by  the  charter  of  the  bank; 
that  is  to  say,  maintaining  gold  reserves  equal  to  40  per  cent  of  the 
total  amount  of  bills  issued  (from  $10  up)  besides  sight  maturities, 
the  total  amount  of  bills  to  be  issued  not  to  exceed  $26,000,000,  which 
is  less  than  the  amount  authorized  by  the  charter  of  the  bank,  the 
latter  being  three  times  the  amount  of  the  paid  capital  stock  of  the 
bank,  provided  gold  reserves  not  inferior  to  40  per  cent  are  main- 
tained. 

2.  Private  banks  are  empowered  to  make  use  of  their  gold  reserves, 
depositing. the  same  in  the  Banco  de  la  Republica  up  to  $4,000,000, 
and  receiving  in  exchange  bills  from  the  Banco  de  la  Republica,  thus 
raising  the  total  amount  of  bills  to  be  issued  by  the  Banco  de  la 
Republica  to  $30,000,000  in  the  aggregate. 

98257°— 15 41  641 


642  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

3.  From  the  $26,000,000  in  bills  issued  for  the  general  transactions 
of  the  Banco  de  la  Republica,  $4,000,000  were  to  be  applied  to  the 
rediscount  of  commercial  paper  existing  in  private  banks. 

4.  The  bills  of  the  Banco  de  la  Republica  were  accorded  cancelling 
power. 

5.  The  postponement  for  a  period  of  two  months  for  the  fulfill- 
ment of  judgments  for  public  sales  in  all  proceedings  and  the  validity 
of  conditional  contracts  of  sale  for  a  like  period. 

6.  The  postponement  for  one  month  of  the  dispossession  of  those 
who  delayed  payments. 

7.  The  prohibition  of  the  exportation  of  gold. 

III.  RESULTS  or  THE  MEASURES  ADOPTED. 

The  conditions  of  the  banks  in  July  were : 

Deposits  in  current  accounts: 

Banco  de  la  Republica $6,945,863.00 

Private  banks.-  13,  025,  333.  73 


Total 19,  971, 196.  73 

Term  deposits  and  savings  bank  deposits : 

Banco  de  la  Republica 5, 427,  718.  00 

Private  banks__.  _  15,  966,  264.  31 


Total 21,  393,  982.  31 

Discounts  and  loans : 

Banco  de  la  Republica 32,368,753.00 

Private  banks__.  _  36,  508,  958.  78 


Total 68,  877,  711.  78 

Cash,  gold: 

Banco  de  la  Republica 11,692,436.00 

Private  banks 5,  701,  497.  33 


Total 17,  393,  933.  33 

Small  bills,  silver,  and  nickel: 

Banco  de  la  Republica 1,  975, 417. 00 

Private  banks 3,233,528.26 


Total '    5,  208,  945.  26 

Hills  outstanding : 

Large 16,  262,  750.  00 

Small  __.  5,  337,  669.  50 


Total 21,  600,  419.  50 

The  conversion  of  bills  during  the  last  days  of  July,  when  the  pros- 
pects of  war  were  already  evident,  caused  the  gold  stock  of  the  Banco 
de  la  Republica  to  decrease  to  $10,399,446,  when  the  conversion  was 
postponed  by  said  Government  decree ;  large  bills  outstanding  amount- 


MEMORANDUM  BY  URUGUAY. 


643 


ing  to  $16,165,196,  together  with  sight  obligations,  $4,800,810;  total, 
$20,966,000.    Percentage  of  gold  reserves,  49.60  per  cent. 

The  economic  effects  can  be  appreciated  by  the  statements  of  the 
banks  in  July  and  subsequent  months. 


STATEMENT  OF  BANKS. 

1.  Deposits  in  current  accounts : 

1914.                                                   State.  Private.  Total. 

July                                                                $6,945.863.00  $13.025,333.73  $19,971,196.73 

August"!                                                6,458,470.00  11,616,581.78  18,075,061.78 

September..                                6,722,057.00  12,053,183.45  18,775,240.45 

October                                                                    6,943,588.00  12,238,380.72  19,181,968.72 

November"                                                                                    7,147,652.00  12,199,101.55  19,346,753.55 

December.".'!."!!!;!!! 7,445,191.00  11,467,164.55  18,912,355.55 

1915. 

Januarv     -                                        7,560,010.00  12,073,655.78  19,633,665.78 

February 7,626,631.00  12,256,250.81  19,882,881.81 

2.  Term  deposits  and  savings  bank  deposits : 

1914. 

July $5,427,718.00  $15,966,264.31  $21,393,982.31 

August 5,538,763.00  15,245,278.40  20,784,041.40 

September 4,649,061.00  14,860,402.74  19,509,463.74 

October 4, 102, 557. 00  13, 972, 878. 27  18, 075, 435. 27 

November 4,107,061.00  13,411,816.13  17,578,877.13 

December 3,857,256.00  13,012,996.11  16,870,252.91 

1915. 

January 3,706,187.00  12,751,779.69  16,457,966.69 

February 3,916,577.00  12,518,635.03  16,435,212.03 

3.  Discounts  and  loans. 

1914. 

July.. 832,368,753.00  $36,508,958.78  $68,877,711.78 

August 35,095,000.00  35,561,287.05  70,656,287.05 

September 35, 657. 584. 00  35.697, 590. 61  71, 355, 174. 61 

October 35,743,370.00  35,688,567.34  71,431,937.34 

November 35, 675, 535. 00  34, 170, 426. 07  68, 845, 961. 07 

December 34,249,523.00  33,405,258.93  67,654,781.93 

1915. 

January 33,117,429.00  33,052,078.98  66,169,507.98 

February 33,902,002.00  31,754,848.85  65,656,850.85 

4.  Gold  stock: 

1914. 

July $11,692,436.00  $5,701,497.33  $17,393,933.33 

August 10,564,072.00  4,404,202.21  14,968,274.21 

September 10,449,514.00  4,710,241.92  15,159,755.92 

October 10,934,871.00  5,256,203.75  16,191,074.75 

November 11,058,870.00  5,359,509.34  16,411,379.34 

December 11,128,834.00  5,287,441.61  16,416,275.61 

1915. 

January 11,633,756.00  4,563,926.84  16,197,682.44 

February 12,016,561.00  4,979,156.88  16,995,717.88 

In  the  last  tables  gold  in  deposit  held  by  the  Banco  de  la  Kepub- 

lica  from  other  banks  and  that  placed  in  the  legations  is  not  men- 
tioned. The  real  gold  situation  of  the  Banco  de  la  Kepiiblica  in 
March  was  (to-day  it  is  still  more  favorable) : 

Its  own  gold  deposited  in  the  bank $12,  742, 946 

Gold   deposited   in   legations   and   consulate  of   New 

York 1,  675, 104 

$14,  418,  050 

Gold  held  in  trust  deposited  by  private  banks  against  bills 1,  587,  994 


Total  amount  in  the  Banco  de  la  Republica 16, 006,  044 


644 


PAN  AMERICAN   FINANCIAL   CONFERENCE. 


5.  LARGE   BILLS   OUTSTANDING. 
[Privilege  of  the  Banco  de  la  Republica.] 


Against  gold  of 
the  bank. 

Against  gold  in 
trust. 

Against  gold  in 
legations. 

Total. 

1914. 
July 

$16,262  750.00 

$16  262  750  00 

August  

18,614,660.00 

$1,366,110.00 

19,980,770.00 

September 

18,  587,  430.  00 

1,000,000.00 

19,587,430.00 

October 

19.001,460.00 

820,  060.  00 

19  821  520.00 

November 

19  206  010  00 

750  260  00 

19  956  270  00 

December. 

20,177,280.00 

1,  624,  160.  00 

21,801,440.00 

1915. 
January 

19  176,999.20 

1,523  160.80 

$903  567.66 

21  603,727.66 

February 

20  034  585.42 

1  446  994  58 

11  674  474  46 

23  156  054.00 

The  increase  of  bills  outstanding  during  the  last  month  is  in  keep- 
ing with  the  period  of  heavy  exports  in  cattle  products  of  Uruguay. 

At  the  beginning  of  March  the  Banco  de  la  Republica  maintained 
gold  reserves  to  the  amount  of  $16,006,044,  against  $23,156,054  in 
large  bills  outstanding. 

All  the  staple  articles  of  exportation  of  Uruguay — that  is  to  say, 
meats,  wool,  hides,  grease,  and  subproducts — were  in  great  demand 
from  abroad,  with  steadily  increasing  prices.  In  order  to  facilitate 
these  transactions,  as  exchanges  were  rendered  difficult,  the  deposits 
of  gold  in  the  Uruguayan  legations  were  authorized. 

IV.  FOREIGN  TRADE. 
The  foreign  trade  during  the  last  years  has  been : 


Years. 

Importation. 

Exportation. 

Total. 

1909 

$36  944  106 

$45  109  191 

$82  053  297 

1910 

40  814  161 

40  935  638 

81  749  799 

1911...       .        ..       .... 

44,798  175 

42  499  870 

87'  298*045 

1912 

49  487  576 

-  48  800  744 

98  288  320 

1913 

50  352  901 

49  896  392 

100  249  293 

1914 

37'  234'  877 

52'  4  18*  802 

89  653  679 

In  1915: 
January 

2  291  542 

6  932  240 

February  

2,  236,  201 

5,461,857 

March.. 

3  114  792 

6  084  114 

April 

2  842  851 

5  586  971 

Total 

10  485  886 

24  065  182 

We  see  by  the  importations  of  1914,  as  compared  with  those  of  the 
previous  year,  what  was  the  effect  of  the  war  on  such  importations. 

The  importations  of  great  divisions  on  an  average  of  the  last  years 
are: 

Per  cent. 
Foodstuffs  19.  02 

Textiles  and  manufactures  of 18.  77 

Iron,  steel,  and  products  of _  11.  04 

Stone,  earth,  glass,  etc 11. 10 

Lumber  and  woods 8. 15 

Metals,  not  including  iron 8. 15 


MEMORANDUM  BY  URUGUAY. 


645 


Per  cent. 

Industrial  oils 3. 12 

Drugs   2. 24 

Live  stock 1.  94 

Other  products 22.  28 

Exports : 

Live-stock  products 90.  24 

Agricultural  products • 4.  23 

Mineral  products 4.  GO 

Game  and  fishing  products .46 

Ship  provisions .  47 

Y.  TRADE  BETWEEN  THE  UNITED  STATES  AND  URUGUAY. 

The  trade  between  the  United  States  and  Uruguay  attained  its 
highest  figures  in  the  fiscal  year  of  1914,  wherein  mercantile  transac- 
tions were  carried  on  which  amounted  in  the  aggregate  to  $13,356,410, 
as  against  $9,972,842  in  1913,  $10,753,821  in  1912,  $6,931,447  in  1911, 
and  $11,686,041  in  1910.  The  following  tables  will  give  the  various 
items  of  importations  and  exportations : 


Years  ending  on  June  30. 

1910 

1911 

1912 

1913 

1914 

EXPORTS. 

Meat  products  

$185.631 

$200,866 

$162,696 

$55,  588 

$2,  533.  262 

Bones  horns  etc 

48.  021 

66  996 

55,716 

38  529 

75  304 

Feathers  

2,370 

3,195 

17,  230 

27,369 

10,364 

Guano  and  fertilizers.  .            

62.  393 

47,  923 

28,  193 

65,777 

88  141 

Animal  hair 

133  020 

103  560 

93  274 

61  062 

50  208 

Leathers  

5,  167.  432 

1,009,164 

2,  196,  876 

1.  513,  332 

2.782,139 

Refuse,  tailings  etc.. 

5  721 

37  483 

19  388 

9  092 

23  748 

Wool 

1  779  341 

123  665 

624  551 

654  211 

2  118  862 

Other  products. 

29  967 

20  884 

33  752 

25  737 

'  33  118 

Total...  .                    .     . 

7  413,896 

1  613,736 

3  231,676 

2  450  697 

7  715  144 

IMPORTS. 

Agricultural  implements    

242,582 

393,  686 

506,  153 

491,  469 

278,  652 

Chemical  drugs  *       t 

130  001 

157  103 

168  169 

166  4C7 

141  314 

Manufactured,  cotton        

84,814 

126,997 

123,  854 

146,344 

102,  149 

Explosives 

22  608 

156  858 

51  035 

52  547 

53  625 

Iron  and  steel  wire         

79,918 

61,946 

112,  184 

88,  Oil 

55,  786 

Iron  and  steel,  machinery  and  implements. 
Manufactured  leathers  

539,955 
170,  179 

790,812 
182,  915 

1,419,293 
253,  724 

1,473,385 
297,  524 

819,836 
247,  737 

Petroleum,  and  oils 

1  171,855 

1,016,335 

1  113,588 

1  587,406 

1  520,415 

Paper  and  cardboards  

38,  488 

43,928 

59,301 

53.  493 

67,  546 

Tobacco  

2,305 

3.175 

1.935 

450 

Finished  and  unfinished  lumber  

916,218 

1,046,446 

1,310,969 

1,288,211 

850,  770 

Vehicles  and  their  parts 

169.  153 

357,  407 

511,474 

551,  671 

423,  884 

Instruments  for  scientific  uses 

75  961 

37  777 

53  944 

11  489 

10  095 

Strings  and  ropes  

100,  855 

146,477 

117,  202 

213,545 

105,  874 

Rosiri  and  turpentine 

167,  759 

252,021 

233  828 

260  925 

130  822 

Other  articles  manufactured  and  foodstuffs. 

359,434 

543,828 

843,652 

839,208 

832,  761 

Total 

4  272  145 

5  317  711 

6  880  325 

7  522  145 

5  641  2G6 

EXPORTS. 


Upon  closely  examining  the  exportation  tables  one  can  see  from 
the  start  that  Uruguay  sold  to  the  United  States  during  the  fiscal 
year  of  1914  products  to  a  greater  value  than  during  the  three  pre- 
ceding years,  1911,  1912,  and  1913,  in  the  aggregate. 


646  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

Meat  products. — It  is  noticeable  likewise  that  the  designation  of 
meat  products  appears  for  the  first  time  in  large  amounts.  During 
the  first  four  years  of  the  last  period  of  five  years  the  annual  sales 
to  the  United  States  of  these  products  of  Uruguay  did  not  reach 
more  than  $200,000.  In  1914  this  item  amounted  to  $2,533,262. 
These  figures  refer  merely  to  the  direct  exportations  from  Monte- 
video to  New  York  from  October,  1913,  until  June,  1914.  During 
the  same  period  there  were  exported  to  Europe  meat  products  of 
Uruguay  valued  at  $741,000,  thus  giving  a  total  of  $3,274,262,  repre- 
sented by  16,388,210  kilograms.  As  is  well  known,  this  extraordi- 
nary increase  of  our  sales  of  meat  products  to  the  American  Union 
owes  its  origin  to  the  last  amendment  of  the  United  States  tariff, 
which  placed  these  products  in  the  list  of  articles  that  entered  the 
country  free  from  duty. 

On  account  of  the  European  war  the  entries  of  Uruguayan  meat 
products  went  down  considerably  during  the  second  half  year.  The 
exportations  from  our  country  are  diverted  to  European  markets, 
whose  military  administrations  pay  2,  3,  and  4  cents  more  per  pound. 
However,  the  United  States  received  Uruguayan  meats  for  the  value 
of  $1,144,546  during  the  last  six  months  of  the  year,  and,  moreover, 
they  sold  to  the  Governments  of  the  belligerent  countries  several 
cargoes  of  Uruguayan  meat,  the  same  having  arrived  in  the  ports 
of  the-United  States. 

'Wool. — Uruguayan  wool — which  the  new  tariff  law  exempts  from 
entry  duties — is  sold  in  larger  quantities  than  ever  before  to  the 
United  States.  During  the  fiscal  year  of  1914,  by  a  direct  route, 
4,180,520  kilograms  were  entered  from  Uruguay,  with  a  statistical 
value  of  $2,118,862.  Imported  via  Belgium  came  920,090  kilograms 
and  from  the  Argentine  Republic  21,370  kilograms,  with  a  total 
value  of  $883,410.  Therefore  during  that  year  the  United  States 
bought  wool  in  Uruguay  for  the  amount  of  $3,002,272. 

The  arrival  of  Uruguayan  wool  to  the  United  States  via  Europe, 
paying  double  freight,  insurance,  and  commissions,  is  due  to  the 
following  fact:  The  textile  industry  of  the  United  States  is  of  a 
somewhat  speculative  character,  and  the  necessity  of  the  article 
itself  can  not  be  anticipated  not  even  approximately  by  the  factories. 
Thus  these  industrial  establishments  may  not  require  large  quanti- 
ties of  wool  at  the  beginning  of  the  year  at  which  period  they  can  be 
acquired  in  Uruguay  in  great  abundance,  and  may  need  them  toward 
the  middle  of  the  year  when  what  is  stored  in  our  country  amounts 
to  nothing.  However,  the  sending  of  competent  buyers  to  Mon- 
tevideo at  the  opportune  time  will  contribute  to  give  considerable 
expansion  to  this  trade. 

Hides. — During  the  fiscal  year  of  1914,  6,499,340  kilograms  of  cat- 
tle hides  from  Uruguay  were  imported  to  the  United  States,  valued 


MEMORANDUM  BY  URUGUAY. 


647 


at  $2,782,139,  which  are  the  highest  figures  of  the  five-year  period 
with  exception  of  the  year  1910,  in  which  year,  on  account  of  the 
abolition  of  the  customhouse  duties  on  hides  these  products  were 
received  for  the  sum  of  $5,167,432  with  a  weight  of  13,971,930  kilo- 
grams. By  way  of  Europe  in  1914  there  also  entered  from  Uruguay 
hides  in  quantities  impossible  of  ascertaining  with  accuracy,  but 
whose  value  was  not  below  $500,000. 

As  far  as  the  second  half  year  of  1914  is  concerned,  be  it  on  account 
of  the  new  necessities  brought  about  by  the  European  war  or  for 
other  reasons,  the  volume  of  Uruguayan  hides  purchased  by  the 
United  States  was  three  times  as  much  as  that  of  the  previous  simi- 
lar period  in  the  preceding  year,  but  with  a  decrease  in  its  value. 
The  856,440  kilograms  of  1913  are  worth,  statistically  speaking,  55 
cents,  and  the  2,361,220  kilograms  of  1914  were  calculated  at  42  cents. 

Other  products. — The  exportation  of  fertilizers  shows  the  highest 
value  in  the  five-year  period— $88,141  in  1914  against  $65,777  in  1913. 
The  same  thing  happened  with  the  bones,  horns,  etc.,  whose  highest 
figures  were  $75,304  in  1914  and  $66,996  in  1911.  The  exportation 
of  animal  hair  decreased  without  interruption  from  $133,020  to 
$50,206  in  the  extremes  of  the  five-year  period.  The  exportation  of 
ostrich  feathers  also  decreased  as  compared  with  those  of  the  two 
previous  years,  but  shows  considerable  increase  in  the  second  half 

year. 

In  short,  the  real  purchases  made  by  the  United  States  in  Uruguay 
in  1914  can  be  summarized  as  follows: 


Products. 

By  direct 
route. 

By  indirect 
route. 

Total. 

Meats                              

12,533,262 

$741,900 

$3,275,162 

Wool                                                 

2,118,862 

883,410 

3,002,272 

Hides 

2,  782.  139 

500,000 

3,  282,  139 

280,881 

300,000 

580,  881 

Total 

7,  715,  144 

2,425,310 

10,  140,  454 

IMPORTS. 

Importations. — The  effects  and  consequences  that  the  European 
war  had  on  our  country,  the  principal  characteristic  of  which  was 
the  forced  restriction  of  credit  of  the  banking  institutions,  are 
clearly  reflected  in  the  importations  of  1914;  that  is  to  say,  the  pur- 
chases made  by  Uruguayan  merchants  in  the  United  States.  The 
trade  of  Uruguay  with  the  United  States  decreased  not  only  because 
its  buying  capacities  were  diminished  but  also  because  it  placed  itself 
in  harmony  with  the  whole  world;  that  is  to  say,  in  a  situation  of 
prudent  expectancy.  It  imported  from  the  United  States  less  iron 
and  lumber,  because  probably  the  erection  of  buildings  decreased  in 
importance ;  less  machinery  and  iron  and  steel,  because  its  industries 
did  not  increase  their  volume  of  production,  and  even  possibly  de- 


648 


PAN   AMERICAN    FINANCIAL   CONFERENCE. 


creased.  On  the  other  hand,  Uruguay  maintains  its  large  purchases 
of  petroleum  and  oils,  and  also  its  most  modest  acquisition  of  chemi- 
cal and  drug  products,  because  it  is  not  possible  to  do  without  those 
elements  of  necessity  which  are  indispensable  in  the  existence  of  all 
enlightened  nations. 

The  orders  of  Uruguay  reach  $5,641,266— that  is  to  say,  $1,880,879 
less  than  in  1913  and  $1,239,059  less  than  in  1912.  Petroleum  and 
oils  reach  the  sum  of  $1,520,415,  which  is  approximately  the  aggre- 
gate of  the  previous  year  and  $406,827  more  than  in  1912.  The  im- 
portations of  iron  and  steel,  machinery  and  implements,  decrease  to 
$1,473,385  in  1913,  to  $819,836  in  1914,  and  the  unfinished  and  finished 
lumber  from  $1,288,211  to  $850,777.  Vehicles  and  their  parts  slightly 
decrease  from  $551,671  to  $423,884.  In  implements  and  agricultural 
machinery  a  considerable  decrease  is  likewise  noticeable ;  the  numbers 
are,  respectively,  $491,496  and  $278,652.  The  same  thing  happens 
with  sisal  grass  and  twine,  which  decrease  from  $213,545  to  $105,874; 
rosin  and  turpentine  from  $260,925  to  $130,822 ;  iron  and  steel  wire 
from  $88,001  to  $55,786;  and  manufactured  cotton  from  $146,344  to 
$102,149.  Instruments  of  scientific  use  and  manufactured  hides  are 
maintained  at  their  customary  amounts.  Paper  and  cardboard  rise 
from  $53,493  to  $67.546.  The  importations  of  tobacco  are  so  insig- 
nificant that  they  are  no  longer  mentioned  in  the  statistics  of  1914. 

Viewed  as  a  whole,  our  sales  to  the  United  States  amount  to 
$10,140,454  and  our  purchases  to  $5,641,266.  Therefore  Uruguay  gains 
in  its  mercantile  transactions  with  the  American  Union  $4,499,188 
in  the  fiscal  year  of  1914.  This  balance  in  favor  of  our  country 
reaches  nearly  $10,000,000  in  the  calendar  year  of  1914,  for  accord- 
ing to  the  last  official  data  of  the  United  States  our  sales  increased 
up  to  $14,000,000  and  our  purchases  hardly  exceeded  $4,000,000. 

VI.  FINANCIAL  SITUATION. 

The  economic  situation  of  Uruguay  was  satisfactorily  relieved. 
The  financial  situation,  however,  presented  the  following  adverse 
features : 

The  revenue  of  the  country  was  decreasing,  particularly  the  cus- 
toms receipts,  as  can  be  seen  by  the  following  table : 


Months. 

1913-14 

1914-15 

July                       ..                                 

$543,  729 

$511,274 

August 

1,243,986 

915,237 

September  

1,323,199 

898,461 

October 

1,412,591 

848,  157 

November 

1  058  972 

694  115 

December                      .                                                            

1,534,264 

951,121 

January 

948  330 

G98  298 

February  

1,049,432 

76G  K72 

March 

1  700,939 

l,-1.r>0  732 

April  

1,032,702 

MEMORANDUM  BY  URUGUAY. 


649 


The   total   revenue    (customs   duties,   direct,    and   internal   taxes, 
etc. )  showed  the  following  figures : 


Months. 

1913-14 

1914-15 

Difference. 

July 

$849  637 

$806  203 

$43  434 

August  

2,  104,  276 

1,959,624 

144,652 

September 

2.  656.  60S 

1,864,324 

792,  284 

October 

2  136  783 

1  525  039 

611  744 

November  

1,691.081 

1,244,289 

446,792 

December. 

2,218,913 

1,494,834 

724  079 

January 

2  135  328 

1  674  789 

460  539 

February.  .  . 

2,  496,  444 

2,  436,  825 

59,619 

March...  . 

3,  788,  260 

3,  488,  016 

300,  244 

Totals: 

From  July,  1913,  to  March,  1914 $20, 077, 330 

From  July,  1914,  to  March,  1915 16, 493, 941 

Difference 3,583,389 

FINANCIAL,  LEGISLATION. 

The  charter  of  the  Banco  de  la  Bepublica  stipulated  that  from  the 
yearly  profits  50  per  cent  should  go  to  the  Government  Treasury  as 
general  revenue  and  50  per  cent  should  remain  with  the  bank  and 
as  a  surplus  increase  the  amount  of  its  capital.  New  legislation  was 
sanctioned  empowering  the  Banco  de  la  Republica  to  retain  the  whole 
of  the  profits  (100  per  cent)  and  increase  with  it  the  capital  and 
therefore  the  loaning  power  of  the  bank  for  the  benefit  of  trade  and 
industries. 

The  profits  of  the  bank  in  1914  were  $1,200,000,  and  its  capital  was 
raised  to  $13,262,000,  all  paid  in. 

The  increase  of  capitals  by  means  of  accumulated  profits  since  1910 
has  been  thus : 

1910 $8, 195,  358.  06 

1911 9,  247,  650.  96 

3912__  11,075,872.99 

1913 12,  062,  757.  88 

1914__  13,262,757.88 

The  financial  capacity  of  the  bank  saved  the  economic  situation 
of  the  country. 

In  September  a  law  was  promulgated  authorizing  the  floating  of 
an  internal  loan  amounting  to  $4,000,000  at  8  per  cent  interest  and 
6  per  cent  for  sinking  fund.  $1,000,000  were  intended  for  public 
works,  roads,  and  schools ;  $3,000,000  to  meet  the  decrease  in  the  cur- 
rent expenses  of  the  budget,  payments  of  works  of  public  utility  con- 
tracted by  former  administrations,  and  the  purchasing  of  the 
mortgage  bank. 

The  interest  of  8  per  cent  was  fixed  because  the  loan  was  issued 
at  par  and  the  prevailing  commercial  and  banking  interest  was  as  low 
as  9  and  10  per  cent  at  that  time  in  Montevideo. 


650  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

To  meet  payments  of  interest  of  this  loan,   called   "Vales  del 
Tesoro,"  the  following  taxes  were  imposed : 
(a)  An  increase  on  the  inheritance  tax. 
(5)  A  tax  on  the  export  of  live  stocks. 

(c)  Tax  on  statistics  (an  import  and  export  tax  based  upon  the 
statistical  tariff). 

(d)  An  increase  in  the  taxes  on  wines. 

In  order  to  create  new  general  revenues,  new  taxes  on  spirits, 
cigars,  cigarettes,  and  tobacco  were  levied.  These  laws  were  sanc- 
tioned during  the  last  months  of  1914  and  the  first  of  1915.  As  it 
always  takes  some  time  until  new  taxes  yield  full  returns,  and  in 
order  to  meet  pressing  budget  requirements,  an  internal  loan  of 
$6,000,000  has  been  sanctioned.  The  product  of  this  loan  will  pay 
for  improvements  of  the  port  of  Montevideo  (large  warehouses, 
electric  light  and  power  stations,  railroads,  lands  purchased  for 
Government  docks,  dredging,  etc.).  With  regard  to  this  loan  the 
immediate  requirements  are  only  $4,000,000,  and  there  will  be  no 
difficulty  to  have  them  subscribed  in  Uruguay.  Interest  will  be 
paid  by  means  of  a  5  per  cent  duty  on  general  imports,  excluding 
foodstuffs,  articles  imported  free  of  duty,  and  those  taxed  not  higher 
than  8  per  cent.  It  is  anticipated  that  these  duties  will  yield  yearly 
from  $750,000  to  $800,000.  The  taxes  for  both  loans  "Vales  del 
Tesoro"  (already  floated)  and  interior  debt,  1915  (to  be  floated), 
in  the  aggregate  amounting  to  $10,000,000,  will  yield  from  $1,750,000 
to  $1,900,000. 

The  Government  would  consider  the  advisability  of  converting 
both  these  internal  loans  into  external  ones  if  a  substantial  amount 
of  interest  could  be  saved  this  way.  The  high  interest  on  these  loans 
is  due  to  the  peculiar  circumstances  created  by  the  European  war, 
and  the  Government  has  determined  to  reduce  this  interest  by  means 
of  a  new  financial  operation..  Its  principal  features  might  be  6  per 
cent  interest  and  a  sinking  fund  which  would  pay  off  the  loan  in  10 
or  12  years,,  provided  the  interested  parties  in  taking  this  loan  would 
agree  to  an  issue  price  in  full  accordance .  with  the  credit  and  re- 
sponsibility of  Uruguay. 

The  budget  for  the  fiscal  year  1915-16,  ending  June  30,  amounts  to 
$29,477,311.81,  including  interest  on  public  debts.  The  revenue  is 
$29,578,000,  having  been  estimated  very  conservatively  and  the  cus- 
toms duty  estimates  having  been  cut  down  by  $5,500,000.  The  chief 
sources  of  revenues  due  to  abnormal  conditions  created  by  the  war 
are: 

Customs  duties *  $12,  500, 000 

Taxes  on  real  estate 4,400,000 

Commercial  licenses 1,700,000 

Taxes  on  cigars  and  tobacco 1,  250,  000 

*  Custom  duties  yielded  $17,500,000  In  1913-14. 


MEMORANDUM  BY  URUGUAY.  651 

Special  duties  for  public  education $960,000 

Post  office  and  telegraph 700,000 

Taxes  on  alcohol 805,000 

Taxes  on  matches 320,  000 

Taxes  on  beer ^ 190,000 

Taxes  on  brandy 1 80,000 

Taxes  on  sugar ' 260,  000 

Taxes  on  wines 280.  000 

Export  duties  on  live  stock 480,000 

Revenue  stamped  paper 580,000 

Stamps 360, 000 

Consular   fees 360,000 

In  the  revenues  are  included  incomes  directly  collected  by  some 
Government  institutions  organized  with  capital  originating  in  public 
debts.  Thus  these  institutions  pay  themselves  their  share  of  interest 
received  on  public  debt.  For  example,  the  Banco  de  la  Repiiblica, 
founded  with  the  proceeds  of  a  loan  (5  per  cent,  1896),  contributed 
yearly  $470,000  to  the  Treasury  as  per  interest  and  sinking  fund. 
The  Mortgage  Bank,  which  costs  the  State  $5,000,000,  contributes 
$300,000  yearly  (5  per  cent  interest  and  1  per  cent  sinking  fund) .  The 
Insurance  State  Bank,  established  on  the  basis  of  a  loan  of  $3,000,000, 
contributes  ($180,000)  yearly  (5  plus  1  per  cent).  The  State  electric 
light  and  power  plants,  capitalized  with  the  proceeds  of  a  $4,500,000 
loan,  contributes  $270,000  (5  plus  1  per  cent). 

PUBLIC  DEBTS. 

The  largest  debt  of  Uruguay  is  the  consolidated  debt,  originating 
in  a  loan  of  19,570,000  pounds  sterling,  3J  per  cent  interest  and  1  per 
cent  sinking  fund.  In  1892  the  distribution  of  these  securities  was 
as  follows: 


Distribution  of  securities. 

Pounds 
sterling. 

Per  cent. 

In  Europe         

16  623  460 

86  27 

In  Uruguay  

2,645,040 

13.73 

In  1915: 
In  Europe 

11  474  020 

69  73 

In  Uruguay 

4  980  000 

30  27 

The  consolidated  debt  is  considered  the  true  barometer  of  the 
external  credit  of  Uruguay.  It  is  a  security  highly  valued  by  in- 
surance companies,  savings  banks,  etc. 

During  the  present  European  war  the  quotations  of  the  debt  were 
around  65  per  cent,  thus  yielding  net  5.35  per  cent  interest. 

Next  comes  the  conversion  loan  taken  by  the  Banque  de  Paris  et 
des  Pays  Bas  at  90  per  cent  net  and  sold  to  the  public  at  97  per  cent. 
The  present  circulation  of  these  securities  is : 


652  PAN   AMERICAN   FINANCIAL   CONFERENCE. 


Distribution  of  conversion  loan. 

Circulation. 

Per  cent. 

In  Europe       

$20,  745.  514 

70.74 

In  Uruguay. 

8,579,000 

29  26 



Total  

;...                             

29,  324,  514 

100.  00 

This  shows  that  30  per  cent  of  the  two  principal  public  debts  of 
Uruguay  are  held  in  the  country,  which  proves  the  increasing  wealth 
of  Uruguay.  And  this  is  the  more  remarkable,  as  people  in  Uruguay 
tend  more  to  invest  their  savings  in  the  purchases  of  land  and  mort- 
gages than  in  securities. 

The  Guaranty  Debt,  4  per  cent,  whose  circulation  is  $2,630,200  be- 
longs to-day  to  the  State,  as  same  was  redeemed  by  the  purchasing  of 
the  mortgage  bank  which  had  these  securities  as  a  part  of  its  capital. 

The  Unified  Interior  Debt,  4  per  cent,  which  amounts  to-day  to 
$1,448,650,  is  held  in  London  by  a  company  to  the  extent  of  $1,100,000, 
the  balance  being  in  Uruguay.  Noteworthy  is  the  fact  that  the  com- 
pany which  holds  these  4  per  cent  securities  is  anxious  to  keep  them 
and  does  not  avail  itself  of  the  privilege  of  having  redeemed  the 
amount  subject  to  redemption  by  means  of  the  sinking  fund. 

The  Insurance  State  Bank  loan,  $3,000,000,  5  per  cent  belongs  to 
the  State,  as  the  bank  never  felt  the  necessity  of  selling  bonds  and 
has  already  substantial  reserves. 

In  1910  the  public  debt  of  Uruguay  was  $136,214,000,  increasing  to 
$142,873,000  on  December  31,  1914.  But  it  is  well  to  keep  in  mind 
that  the  increase  at  $6,559,000  is  more  apparent  than  real  for  the 
following  reasons : 

(1)  That  the  debt  of  the  Insurance  Bank  is  held  by  this  institution 

and  now  amounts  to $2,921,200 

The  bank  holding  at  the  same  time  other  securities  to  the  amount  of  _         100,  000 


3, 021,  200 

(2)  That  the  debt  of  redemption  of  Government  lands,  amounting  to 
$1,282,528,  converted  an  old  floating  loan,  which  represented  for 

the  Government  a  higher  value  equal  to 1, 282,  528 

(3)  That  the  debt  "certificados  amortizables "  is  a  loan  made  by 
the  State  to  the  holders  of  other  securities,  with  relation  action 

to  profits  of  the  Mortgage  Bank,  amounting  to 1, 151, 170 

(4)  That  with  the  purchase  of  the  mortgage  bank  the  guaranty 

debt  was  reduced  to  the  extent  of 2,630,200 

(5)  That  the  internal  debt  of  the  State  electric-power  enterprise, 
$4,500,000,  issued  in  1913,  was  exchanged  w,ith  foreign  debt  to  the 

extent  of 3,  705, 188 

(G)  That  the  Government  holds  "Vales  del  Tesoro  "  in  a  special 

fund 845,100 

(7)  That  a  parliamentary  commission  holds  with  the  same  purpose.  487,  450 
(S)  That  the  Public  Charities,  a  Government  institution,  holds 

gifts  and  legacies  to  the  amount  of GS3,000 


Total—  13,  805,  836 


MEMORANDUM  BY  URUGUAY.  653 

The  foregoing  shows  that  although  the  public  debt  increased  by 
$6,659,000  from  1910  to  1914  the  State  owns,  one  way  or  the  other, 
$13,805,836  of  the  debt.  Adding  to  this  increase  the  $6,000,000  of 
internal  debt  to  be  issued,  the  total  increase  from  1910  to  1915  will 
be  $12,659,000,  while  the  values  redeemed  and  acquired  by  the  State 
amount  to  $13,805,836. 

GOVERNMENT  PROPERTY. 

Against  the  public  debt  the  State  has  acquired  the  following  values 
from  1910  to  1914: 

The  Banco  de  la  Republica,  whose  capital  on  December  31,  1910, 
was  $7,531,000,  accumulated  profits  during  the  following  four  years 
to  the  amount  of  $5,219,000,  which  capitalized  at  6  per  cent  repre- 
sent a  value  of  $22,000,000,  and  estimating  the  privileges  of  the  bank, 
monopolized  right  of  issuing  bills,  etc.,  at  $8,000,000,  the  total  assets 
of  the  bank  may  be  estimated  at  $30,000,000.  The  State  Insurance 
Bank,  established  in  1911,  has  been  a  remarkable  success.  Its  profits 
in  1914  were  $253,000,  which  capitalized  at  6  per  cent  represent  a 
value  of  $4,220,000.  Added  to  its  reserves  and  privileges  (estimated 
at  $5,780,000)  the  value  of  the  assets  of  the  bank  may  be  considered 
to  be  $10,000,000. 

The  Mortgage  State  Bank  cost  the  State  $5,000,000  in  1912,  and 
with  capitalized  profits  ($1,617,000)  and  privileges  is  worth 
$12,000,000. 

The  electric  power  enterprise  is  a  State  monopoly.  Its  capital 
based  on  6  per  cent  capitalized  profits  was  $9,276,000  in  1910-11  and 
$15,580,000  in  1912-13,  and  as  the  State  monopoly  is  worth  at  least 
$10,000,000,  the  total  value  of  the  enterprise  may  be  put  down  at 
$25,800,000.  Thus  we  come  to  the  following  conclusions  relative  to 
the  increased  and  total  value  of  these  four  Government  financial  in- 
stitutions during  the  years  1910  to  1915 : 


Institutions. 

Increased 
value. 

Total 
value. 

Banco  de  la  Reptiblica 

$5  209  000 

$30  000  000 

Insurance  bank  

4  220  000 

10  000  000 

Mortgage  bank      

6  617  000 

12'  ooo'  ooo 

Electric  light  and  power  

6  304  000 

25  580  000 

22,350,000 

77,580,000 

There  has  been  furthermore  acquisitions  and  improvements  rep- 
resenting the  following  values: 

Port  of  Montevideo $3,528,000 

Land  purchase  for  agricultural  stations 550,  000 

Geological    Institute 100,  000 

Buildings  for  legations,  the  police,  and  jails 1,052,000 


654 


PAN   AMERICAN   FINANCIAL   CONFERENCE. 


Bureau  of  fisheries $100,000 

Legislative  palace 111,  000 

Roads  and  bridges 3,898,000 

Parks  and  other  properties 3,  292,  000 

Increased  value  of  the  Government  institutions  mentioned 22,  360,  000 

Total  value 34,  991,000 

STATISTICS. 

Stock  of  cattle ___heads__  8, 000, 000 

Stock  of  sheep do 25,000,000 

Stock  of  horses do 500,  000 

Stock  of  hogs do 180,000 

Appraises  value  of  land $1,200,000,000 

Wheat  crop  (average) tons_,  200,000 

Corn  crop do 200,  000 

Linseed  crop. do 27,  000 

Oat  crop do 27,  000 

Wine  crop do 34,  000 

Tobacco  crop do 1, 000 

Railway  extension kilometers..  2,  540 

Railway   investments $90, 000,  000 

Railway  gross  earnings $7,  200,  000 

Railway  guarantees 700,  000 

Passengers  carried 2,  000, 000 

Freight  carried tons__  1,  600,  000 

Live  stock  carried heads—  1,  800,  000 

Cows  slaughtered : 

1911 do 192,657 

1912 do 200,794 

1913 do 13, 115 

1914 1 do 9,842 

Other  cattle  slaughtered : 

1911 do 382,  624 

1912 do 351,384 

1913 do 418,204 

1914 do 423,384 

Sheep  slaughtered : 

1911 do 296,891 

1912 do 333,  544 

1913 do 309, 152 

1914 do 116,869 

Value  of  slaughtered  live  stock $22,  002,  880 

Wool  crop $25,  000,  000 

The  staple  products  of  Uruguay  being  meats,  hides,  and  wool, 
at  present  in  great  demand  by  the  belligerent  countries  and  others, 
the  prices  for  these  commodities  have  attained  extraordinary  high 
levels,  and  are  responsible  for  the  large  trade  balances  which  Uru- 
guay is  accumulating  and  whose  beneficial  powers  will  show  their 
full  action  when  peace  has  been  signed. 


MEMORANDUM  SUBMITTED  BY  THE  DELEGATION 
OF  VENEZUELA 


655 


MEMORANDUM  SUBMITTED  BY  THE  DELEGATION"  OF  VENEZUELA. 


MR.  CHAIRMAN  AND  GENTLEMEN  : 

My  first  thought — in  seeing  congregated  here  representatives  of  all 
these  nations — is  dedicated  to  the  memory  of  the  initiator  of  Pan 
American  congresses,  the  liberator,  Simon  Bolivar,  founder  of  the 
independence  of  Bolivia,  Peru,  Ecuador,  Colombia,  and  that  of 
Venezuela,  the  last  of  which  I  have  the  honor  to  represent. 

Pardon  me,  gentlemen,  if  I  make  a  short  reference,  born  from  a 
patriotic  sentiment,  regarding  that  subject,  which  digression  I  am 
sure  you  as  honorable  and  worthy  representatives  of  the  republican 
entities  of  the  world  of  Columbus  will  excuse. 

The  liberator,  Simon  Bolivar,  called  the  first  Pan  American  Con- 
gress at  Panama  in  1824.  It  convened  in  1826.  .For  various  reasons 
which  need  not  be  mentioned  here,  it  did  not  meet  with  great  success. 
The  United  States  appointed  two  delegates  after  some  debating  in 
Congress.  One  of  them  died  on  the  way  to  Panama  and  the  other 
reached  that  city  when  the  congress  had  already  been  adjourned. 
The  apparent  failure  of  the  Panama  Congress  proved  to  be  in  later 
years  the  basic  principle  for  initial  success  of  other  congresses. 

The  eminent  American  statesman,  Henry  Clay,  hailed  Bolivar  as 
the  "Washington  of  South  America,"  and  the  brilliant  Lafayette 
on  a  certain  occasion  did  not  fail  to  understand  the  true  significance 
of  that  congress,  with  that  inborn  intuition  with  which  supermen 
seem  to  be  able  to  penetrate  the  future.* 

Years  later,  in  1881,  the  distinguished  American  statesman,  Mr. 
James  G.  Blaine,  then  Secretary  of  State,  called  a  Pan  American  con- 
ference which  convened  in  1889.  Mr.  Andrew  Carnegie  was  one  of 
the  delegates  of  the  United  States,  and  to  his  philanthropic  spirit 
and  staunch  support  of  Pan  Americanism  we  owe,  in  a  great  measure, 
the  great  palace  of  the  Pan  American  Union,  which  stands  to-day  by 
itself  in  commemoration  of  one  of  the  most  unique  and  active  institu- 
tions of  the  world. 

To-day  we  find  ourselves  congregated  for  another  Pan  American 
conference,  by  virtue  of  an  invitation  through  the  honorable  and 
talented  Secretary  of  State,  Mr.  William  Jennings  Bryan. 

While  Mr.  Blaine  belonged  to  one  of  the  two  great  political  parties 
of  this  country,  Mr.  Bryan  has  been  identified  with  the  other  party, 

*  See  Appendix  to  this  memorandum. 
98257°— 15 42  657 


658  PAN  AMERICAN   FINANCIAL   CONFERENCE. 

which  clearly  proves  the  fact  that,  no  matter  what  the  aspirations 
are  in  both  political  organizations,  they  are  animated  by  the  same 
spirit  of  Pan  American  solidarity. 

It  is  incumbent  upon  the  honorable  Secretary  of  the  Treasury  of 
the  United  States  to  direct  the  proceedings  of  this  conference,  the 
object  of  which  is  very  specific  in  its  various  phases.  No  doubt  its 
results  will  be  far-reaching,  indeed,  for  all  the  countries  represented, 
as  we  shall  profit  immensely  by  the  experience  acquired  through 
those  who  are  considered  to-day  as  the  masters  of  finance  of  the 
world. 

It  was  shortly  after  the  1914^15  budget  was  put  in  force  in  Vene- 
zuela that  the  European  war  broke  out.  The  suddenness  of  its  ap- 
pearance caused  a  great  shock  to  the  well-balanced  financial  systems 
of  the  world,  for  it  was  equivalent  to  the  partial  destruction  of  an 
internationally  woven  netting  in  which  all  the  parts  bear  a  common 
relation  to  each  other. 

Venezuela,  being  a  country  whose  main  source  of  revenue  is 
derived  from  import  duties,  did  not  fail  to  recognize  at  once  the 
transcendence  of  this  unexpected  event  and  immediately  took  the 
initiative  to  see  that  the  normal  course  of  the  budget  was  not 
altered,  notwithstanding  the  expectation — which  proved  true — of  a 
considerable  impairment  in  the  revenues  of  the  Republic, 

The  Government  of  Venezuela  decided  that,  to  meet  the  situation 
squarely  and  with  some  degree  of  success,  it  was  necessary  to  act 
with  great  caution.  Instead  of  increasing  duties  and  taxes  to  make 
up  to  some  extent  the  expected  decrease  in  revenues,  it  adopted  a 
course  involving  less  hardship  for  her  people  to  be  burdened  with: 
It  reduced  the  personnel  in  the  Government  offices  and  forthwith 
proceeded  to  also  reduce  the  budget  expenditures  by  25  per  cent. 
Although  this  decrease  was  enforced  in  August,  the  operation  of  the 
budget  on  the  75  per  cent  basis  proved  by  actual  reckoning  that  it 
was  insufficient  to  meet  the  decrease  in  revenues.  By  November  fol- 
lowing another  retrenchment  of  expenditures  on  the  same  proportion 
was  decreed.  The  results  so  far  obtained,  after  10  months  of  com- 
mercial disturbance  in  the  world,  have  proved  quite  satisfactory  to 
the  Government,  and  Venezuela,  in  spite  of  all,  has  been  able  to 
accumulate  a  considerable  surplus  in  her  treasury,  which  also  speaks 
very  highly  of  the  soundness  of  her  monetary  system. 

Previous  to  the  outbreak  of  the  European  war  conditions  in  gen- 
eral were  quite  flattering,  manifestations  of  certain  prosperity  being 
shown  throughout  the  country  in  the  form  of  industrial  develop- 
ment, especially  in  agricultural  and  mining  pursuits. 

In  facing  the  grave  crisis  of  August,  however,  the  Government 
of  Venezuela  did  not  have  cause  to  be  apprehended  on  her  ability 


MEMORANDUM   BY  VENEZUELA.  659 

to  come  through  with  flying  colors,  for  she  relied  mainly  on  her 
old  stand-by — the  gold  standard — which  had  been  so  powerful  an 
aid  in  times  past,  to  rehabilitate  her  from  effects  of  internecine  dis- 
turbances. 

Venezuelans  are  proud  of  their  monetary  system,  based  on  the 
gold  standard,  which  they  always  have  had,  and  it  has  been  the  aim 
of  all  administrations  to  see  that  it  is  not  impaired  in  the  least. 
In  fact,  this  system  is  the  object  of  special  reference  in  the  Venezue- 
lan constitution.  No  fluctuating  paper  money  exists  in  Venezuela. 
The  bolivar,  our  unit,  is  on  equal  rating  of  exchange  with  the 
franc  and  the  lire.  In  some  months  of  the  year,  when  coffee 
and  cocoa  crops  are  being  raised,  said  unit  is  sometimes  at  a 
premium,  for  it  is  during  that  period  when  gold  is  imported  into 
Venezuela.  Some  find  it  more  profitable  to  pay  a  premium  in  dis- 
counting Venezuelan  drafts  in  that  country  than  to  ship  gold  which 
pays  a  certain  primage  for  transportation,  which  percentage  is  some- 
times higher  than  the  difference  by  the  regular  rate  of  exchange  of 
the  bolivar.  Therefore,  so  far  as  the  monetary  standard  of  Vene- 
zuela is  concerned,  no  relief  is  sought  to  alleviate  inconveniences 
caused  by  a  highly  fluctuating  monetary  standard. 

Although  most  commercial  establishments  in  Venezuela  are  carry- 
ing out  regular  banking  transactions  with  their  correspondents 
abroad,  the  burden  of  banking  facilities  of  the  country  is  carried  by 
three  principal  banking  institutions,  as  follows :  Bank  of  Venezuela, 
Bank  of  Caracas,  and  Bank  of  Maracaibo.  There  are  also  three 
loan  and  saving  banks  of  minor  importance. 

The  Bank  of  Venezuela  has  a  capital  of  12,000,000  bolivares.  Its 
headquarters  are  at  Caracas  and  it  has  agencies  at  La  Guaira, 
Porto  Cabello,  Valencia,  Maracaibo,  Coro,  San  Cristobal,  Barcelona, 
Cumana,  Carupano,  Porlamar,  Juan  Griego,  Guiria,  Maturin,  and 
Ciudad  Bolivar.  It  is  the  collector  and  disburser  of  Government 
funds  throughout  the  country,  excluding  the  Government  treasury 
at  Caracas,  which  takes  care  of  the  capital.  The  issue  of  its  bank 
notes  has  never  reached  $400,000. 

The  Bank  of  Maracaibo,  with  a  capital  of  1,250,000  bolivares,  is 
more  of  a  local  institution. 

The  Bank  of  Caracas  has  a  capital  of  6,000,000  bolivares  and  does 
a  considerable  business  all  over  the  country,  having  branches  in  the 
most  important  commercial  centers.  Here,  again,  we  find  that  this 
bank  has  in  circulation  bank  notes  to  the  amount  of  about  one-tenth 
of  the  issue  allowed  in  its  charter. 

The  proposed  Pan  American  bank,  with  branches  in  the  principal 
cities  of  Latin  America,  in  the  opinion  of  many,  would  be  of  para- 
mount importance  to  shippers  and  manufacturers  of  all  the  American 


660  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

Republics  for  the  clearance  of  a  great  bulk  of  their  commercial 
transactions.  It  is  a  long- felt  necessity,  and  its  operations  could  be 
established,  perhaps,  with  the  active  cooperation  of  the  present  bank- 
ing institutions. 

The  history  of  Venezuela's  public  debt  demonstrates  that  our  loans 
have  always  been  underwritten  in  Europe.  Thinking  that  it  may  be 
of  interest  to  the  conference,  I  beg  leave  to  make  a  short  chrono- 
logical synopsis  of  Venezuelan  loans  and  also  a  general  statement  of 
our  public  debt  of  Venezuela  up  to  December,  1914,  to  wit : 

1820.  Debt  contracted  while  Ecuador  and  Venezuela  formed  part  of  greater 
Colombia.  It  amounted  to  £547,783,  for  which  debentures  were  issued. 

1822.  Loan  by  Graham  &  Powels  for  £2,000,000.     Issue  at  80  per  cent,  6  per  cent 

interest  per  annum.    A  portion  of  this  loan  was  used  to  cancel  the 
debt  of  1820. 

1823.  Loan  of  $30,000,000.     General  revenue  and  tobacco  revenue  pledged  as  a 

guaranty. 

1824.  Loan  of  £4,750,000  by  B.  A.  Goldsmith  &  Co.,  of  Hamburg.     Issue  at  85 

per  cent.     Interest  rate  of  6  per  cent  per  annum.     The  total  indebted- 
ness in  this  year  was  of  £6,750,000. 
1831.  Greater  Colombia  was  divided  into  three  distinct  Republics,  New  Grenada, 

Ecuador,  and  Venezuela. 

1834.  An  apportionment  was  made  in  this  year  for  the  public  debt,  as  follows : 
New  Grenada,  50  per  cent,  or  £3,312,975. 
Ecuador,  21.5  per  cent,  or  £1,424,579. 
Venezuela,  28.5  per  cent,  or  £1,888,396. 

1848.  Conversion  of  active  debt  interest  at  the  rate  of  4  per  cent  per  annum. 
1856.  Venezuela  received  $1,140.000  in  4.5  per  cent  Peruvian  bonds,  as  proportion 

of  debt  from  Peru. 

1862.  Loan  issued  at  London  for  £1,000,000,  at  the  rate  of  interest  of  6  per  cent 

per   annum,    2  per  cent   sinking   fund.     Rate   of   issue,    63   per   cent. 

Pledge  was  given   of  55^  per  cent  of  import  duties  collected  at  La 

Guaira  and  Puerto  Cabello. 

1864.  General  Credit  &  Finance  Co.,  of  London,  took  loan  of  £1,500,000,  at  60 

per  cent  issue  and  6  per  cent  interest. 
3872.  Decree  by  which  custom  receipts  were  divided  into  100  units,  of  which 

27  per  cent  was  allotted  for  the  service  of  the  external  debt. 
1883-1888.  Steps  taken  without   avail  for  the   consolidation  of  the   external 

debt. 

1889-1891.  Public  debt  of  Venezuela  is  divided  into  4  classes:  Domestic,  dip- 
lomatic, foreign,  and  bonds.  In  1891  the  total  debt  of  Venezuela  was 
as  follows: 

Domestic  (5  per  cent),  consolidated $7,595,227 

Foreign    (3  per  cent),  external 13,450,675 

Diplomatic   (13  per  cent) 1,000,000 

1  per  cent  monthly  debt 647,499 

22,  693,  401 

Less  than  14  per  cent  of  revenues  was  pledged  for  the  service  of  these 
obligations. 

1895.  German  loan  of  50,000,000  bolivares  by  Diskonto-Gesellschaft,  of  Berlin, 
at  80  per  cent  issue.  Bonds  bearing  5  per  cent  interest  and  1  per 
cent  sinking  fund. 


MEMORANDUM  BY  VENEZUELA.  661 

1902.  Consolidation  of  various  internal  debts  by  issue  of  bonds  for  65,000,000 

bolivares  at  6  per  cent. 
1902.  Debt  of   allied   powers,    by   virtue   of   protocols   signed  at  Washington, 

totaling  $7,147,386. 

The  following  data  is  taken  from  the  annual  report  of  the  Secre- 
tary of  the  Treasury  of  Venezuela  to  the  present  Congress,  dated 
April,  1915 : 

PUBLIC  DEBT. 

Internal  debt: 

I.  National  internal  consol,  6  per  cent — 

Bolivares. 
First  issue 23,  927.  47 

Second  issue 16,  772. 12 

Bolivares. 

40,  699. 59 
II.  1  per  cent  bonds,  eighth  issue 38,165.62 

III.  National  internal  3  per  cent  consol 59, 068,  721.  47 

IV.  National  internal  consol,  no  interest—       1, 135,  644.  83 

V.  Treasury  bonds  to  bearer 349, 102. 13 

Bolivares. 

60,  632,  333.  64 

External  debt: 

I.  National  3  per  cent  diplomatic  (by  diplo- 
matic conventions) 9,  723,  291.  61 

II.  Provisional  certificates  (Spain) 1,600.00 

III.  Diplomatic  debt   (3  per  cent),  conver- 
sion and  issue  of  1905 101,  267,  650.  00 

110,  992,  541.  61 


Or  a  total  indebtedness  of 171,  624,  375.  25 

This  is  equivalent  to  $33,000,000,  which  is  a  per  capita  of  about  $11. 

At  the  present  time  there  are  some  public  service  companies  which, 
although  organized,  have  failed  to  carry  out  their  plans,  due  to  lack 
of  capital.  This  is  the  time  when  American  capital  should  take  ad- 
vantage of  the  great  opportunity  for  industrial  development  in  the 
Latin  American  countries. 

The  needs  of  merchants  and  manufacturers  can  be  remedied  by 
a  simple  study  of  actual  conditions  of  trade  in  Latin  American 
countries. 

The  last  15  years  have  witnessed  an  unusual  activity  on  the  part 
of  Americans  to  enter  the  South  American  fields  of  commerce  and 
industry.  The  main  question  in  the  minds  of  those  interested  in 
such  a  campaign  has  been : 

How  can  we  control  the  South  American  markets,  which  have 
been  for  so  long  in  the  hands  of  European  competitors  ?  What  would 
be  the  best  plan  to  adopt  in  order  to  succeed  there  ? 

To  reply  to  those  questions  in  their  minutest  details  would  simply 
add  volumes  to  the  volumes  already  written  in  that  respect,  involving, 
naturally,  diversity  of  opinion  in  favor  or  against  any  special  plan 
of  action.  It  may  be  stated  at  the  outset  that  there  are  many  who 
believe  that  a  forceful  action,  regardless  of  study  of  local  or  general 


662  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

conditions  in  South  America,  would  simply  result  in  ousting  the 
Europeans  from  the  position  so  long  held  by  them,  due  to  their 
understanding  of  the  situation.  To  those  seeking  such  immediate 
results  nothing  but  a  dismal  failure  will  be  their  lot. 

In  reasoning  from  cause  to  effect  let  us  take  as  a  separate  unit 
some  of  the  causes  of  the  present  superiority  of  the  European  mer- 
chant in  the  South  American  markets. 

Being  natural  neighbors  in  one  hemisphere,  it  is  reasonable  to 
think  that  the  bulk  of  South  American  commerce  should  be  found 
between  the  United  States  and  South  America.  It  is  not  so,  how- 
ever, for  in  the  long  study  of  the  South  American  markets,  to 
which  Europeans  have  dedicated  time  and  efforts,  they  seem  to  have 
found  the  formula  they  were  looking  for.  They  went  to  South 
America  well  prepared,  knowing  the  language  of  the  country,  its 
customs,  etc.,  even  intermarrying  with  the  natives  in  many  cases. 
Their  thorough  knowledge  of  the  people  and  their  needs  created,  as 
it  were,  a  new  field  in  Europe  for  such  needs.  From  personal  ex- 
perience^ in  my  connection  with  a  European  firm  for  20  years  in 
Venezuela  I  may  state  that  in  the  dry-goods  business,  for  instance, 
the  American  merchant  is  outclassed.  The  European  manufacturer 
will  sell  certain  kinds  of  goods  in,  say,  10  or  15  color  designs,  just 
as  the  customer  wants  them,  for  a  given  number  of  yards.  The 
goods  when  ready  will  be  packed  just  as  the  buyer  wants.  It  may 
need  in  many  cases  a  special  packing  to  withstand  mule-back  trans- 
portation throughout  interior  towns,  where  means  of  communication 
are  far  from  being  perfect  or  comfortable.  In  many  cases  competi- 
tion among  Europeans  themselves  is  so  keen  that  merchants  will 
forward  samples  of  goods  to  their  respective  countries  with  details 
as  to  prices,  conditions,  probable  sales,  etc.,  with  the  result  that  in  a 
few  months  a  new  article  appears  in  the  market  which  will  compete 
successfully.  These  simple  illustrations  give  an  idea  of  how  the 
European  strives  and  struggles  to  conquer  those  fields  of  commerce 
and  industry,  using  all  the  means  at  his  command  to  achieve  his 
ambition. 

How  different  the  United  States  merchant  is !  His  great  country 
and  its  wonderful  resources  have  developed  so  marvelously  in  the  last 
few  generations  that  he  has  been  obliged  to  devote  special  attention 
to  the  domestic  demand  in  all  branches  of  business  and  less  time 
than  he  should  to  exports.  The  development  of  the  domestic  business 
has  reached  such  a  high  mark  that  the  American  business  man  has 
become  almost  the  most  independent  mortal  in  existence,  and  to  such 
an  extent  that  the  buyer  either  has  to  submit  to  his  terms  or  go  else- 
where for  the  goods  he  wants.  In  the  dry  goods  example  cited 
above,  for  instance,  the  American  manufacturer  will  provide  four 
or  five  different  color  designs  instead  of  10  or  15,  which  will  mean 


MEMORANDUM  BY  VENEZUELA.  668 

for  the  purchaser  that  he  shall  have  to  buy  more  goods  than  he 
wants  of  a  certain  kind,  while,  on  the  other  hand,  that  will  give  him 
a  smaller  stock  for  his  customer  to  select  from.  Besides  this,  the 
American  merchant  will  be  reluctant  to  pack  the  goods  as  wanted 
and  very  often  will  oblige  the  buyer  to  repack  at  port  of  arrival  so 
that  goods  may  be  delivered  in  the  interior  towns.  Consequently, 
so  far  as  that  line  is  concerned,  the  European  will  outwit  the  Amer- 
ican. In  other  words,  the  latter  will  try  to  force  the  sale  of  his 
goods  on  the  customer.  In  great  many  instances  this  will  be  done  by 
inexperienced  salesmen  who  do  not  know  even  the  language  spoken 
in  the  territory  they  are  covering,  being  compelled  to  avail  themselves 
of  interpreters  to  carry  out  their  work.  The  disadvantage  of  the 
American  salesman  is  thus  far  clearly  shown,  and  such  a  handicap  is 
aggravated  by  the  important  hinging  fact  that  the  European  will 
grant  to  the  South  American  buyer  from  4  to  10  months'  leeway  to 
make  his  credit  good,  while,  on  the  other  hand,  the  American 
merchant  will  sell  his  goods  on  a  cash  basis,  whether  f.  o.  b.,  f.  a.  s., 
or  c.  i.  f.,  generally  through  a  commission  merchant  in  the  United 
States.  The  commission  merchant  has  to  conform  to  domestic  re- 
quirements in  the  handling  of  exports  and  as  a  general  rule  settle- 
ments are  in  order  in  10  or  30  days.  As  a  consequence  the  carrying 
capacity  of  the  commission  merchant  is  generally  strained  unless  he 
is  backed  by  powerful  financial  support  or  is  heavily  interested  in  the 
agricultural  development  of  those  countries  and  makes  loans  for  the 
raising  of  crops  and  receives  good  consignments  of  South  American 
staples.  The  day  of  the  commission  merchant  is  coming  to  a  close, 
and  his  disappearance  as  a  great  factor  in  exports  is  not  very  far 
off.  This  is  due  to  the  fact  that  a  good  capital  is  needed  to  carry 
the  business  on  the  cash  basis  in  the  United  States,  and  also  to  the 
advantage  to  be  found  in  direct  dealings  with  South  American  mer- 
chants. 

Another  source  where  we  may  find  a  powerful  reacting  agent 
against  South  American  development  by  American  capital  lies  in  the 
attitude  of  some  units  of  the  American  press  toward  South  American 
interests.  In  this  connection,  I  may  say,  that  there  are  certain  news- 
papers which  for  some  unknown  reason  seem  to  be  animated  by  an 
unfriendly  spirit  and  are  prone  to  publish  with  regard  to  South 
America  anything  that  may  be  set  in  type,  whether  opprobrious  or 
inaccurate,  false  or  unjust  to  those  countries.  Such  newspapers  will 
not  take  the  trouble  to  investigate  the  truth  through  the  means  at 
their  command.  Their  utter  indifference  to  anything  revealing  prog- 
ress, industrial  development,  or  other  worthy  activity,  and  their 
apparent  pleasure  to  vilify  those  countries  with  sensational  news  of  a 
militant  character,  has  ruined  on  many  occasions  splendid  prospects 
of  industrial  development  in  South  America  by  American  capital. 


664  PAN   AMEBICAN   FINANCIAL   CONFERENCE. 

Many  ask:  "How  can  we  get  at  those  markets  on  a  permanent 
basis?" 

There  are  some  who  think  that  it  can  be  done  in  the  get-rich-quick 
spirit,  but  they  are  sadly  mistaken.  It  is  surprising  to  see  the  great 
many  who  since  the  European  war  commenced  have  applied  to  South 
American  consulates  for  information  regarding  those  countries.  In 
the  majority  of  instances  the  inquiries  have  been  confined  to  the  ask- 
ing of  data  concerning  import  duties  on  articles  of  their  particular 
line  and  their  probable  or  average  amount  of  imports  and  sale  prices 
of  such  commodities  in  South  America  having  a  European  origin. 
Some  also  have  the  idea  that  consular  officers  act  here  altogether  as 
purchasers  for  their  countries.  Some  visitors  generally  leave  their 
cards,  with  the  request  that  "  if  inquiries  for  such  products  are 
made,  kindly  refer  them  to  us." 

In  order  to  illustrate  business  conditions  in  Venezuela  and  to  give 
an  idea  of  the  hold  that  Europeans  have  on  Venezuelan  commerce, 
I  will  quote  a  few  figures  taken  from  Venezuelan  Statistics  of  1912, 
edition  of  1914,  and  relating  to  the  volume  of  trade  between  Vene- 
zuela and  other  countries. 

For  the  sake  of  brevity  I  will  omit  countries  having  a  trade  of 
less  than  10,000,000  bolivares.* 

Imports,  1912,  106,000,000  bolivares;  exports,  1912,  133,000,000 
bolivares.  Total  volume  of  trade,  239,000,000  bolivares  distributed, 
with  exceptions  noted  above,  among  the  following  countries : 

Bolivares. 

United  States 75,  600,  000 

France 1 53,  200,  000 

Germany 39,  000,  000 

England 37,  800,  000 

Spain__ 12,  400,  000 

Holland _ 12,  300,  000 

Although  the  United  States  leads  with  75,000,000  bolivares,  the 
European  countries  have  a  trade  which  is  more  than  twice  as  large, 
being,  in  fact,  164,000,000  bolivares,  with  the  added  circumstance 
that  the  figures  for  the  United  States  include  their  exportation  of 
gold  to  Venezuela.  In  other  words,  the  United  States  are  only 
getting  about  32  per  cent  of  the  Venezuelan  trade. 

In  the  previous  lines  I  have  endeavored  to  give  a  synopsis  of  the 
causes  of  European  success  and,  on  the  other  hand,  the  effect  of  bad 
management  of  trade  by  Americans ;  and,  further,  I  have  shown  that 
in  the  face  of  those  handicaps  the  United  States  has  in  Venezuela 
individually  more  business  than  any  one  particular  country  in 
Europe,  but  less  than  half  that  of  combined  Europe. 

With  such  a  splendid  geographical  position  as  Venezuela  enjoys 
in  South  America  it  is  really  strange  that  the  trade  of  the  United 

*  Bolivar=$0.193  gold. 


MEMORANDUM  BY  VENEZUELA.  665 

States  and  my  country  is  not  double  what  it  is  to-day.  To  increase 
that  trade  and  to  let  it  reach  its  normal  development  should  be  the 
aim  of  all  Americans  and  Venezuelans.  But  the  former  will  have  to 
take  notice  and  follow  the  steps  of  the  Europeans.  They  will  have 
to  make  a  thorough  study  of  South  American  markets.  Such  a  study 
must  be  made  by  all  means  by  men  capable  and  duly  seasoned  for 
the  task.  Americans  must  make  up  their  minds  that  the  South 
American  must  be  treated  fairly.  They  must  be  ready  to  com- 
ply with  local  demands  in  certain  lines  of  business;  they  must  not 
try  to  impose  conditions  in  a  field  where  the  buyer  will  find  many 
competitors.  If  these  conditions  obtain  throughout  their  dealings, 
and  if,  above  all,  the  American  merchant  sees  his  way  clear  to  give 
some  credit  to  the  South  American  merchant,  as  the  European  does, 
there  is  no  question  but  what  he  will  probably  increase  his  business 
to  a  considerable  extent. 

The  question  of  credit  is  a  very  important  factor  to  be  considered 
in  this  matter.  As  our  merchants  need  funds  to  facilitate  the  mov- 
ing of  crops  of  coffee,  cocoa,  rubber,  etc.,  in  order  to  ship  these 
products  to  foreign  markets  where  they  are  handled  and  consumed, 
the  importance  of  credit  is  most  vital.  Credit,  however,  can  not  be 
established  if  the  American  merchant  does  not  know  well  the  person 
with  whom  he  is  to  negotiate  or  the  conditions  of  the  country  where 
his  money  goes.  Sometimes  a  severe  drought  makes  it  impossible  for 
some  merchants  of  the  interior  to  ship  their  products,  which  are  to  be 
transported  sometimes  by  river  boats  to  the  seaboard,  while  at  other 
times,  in  the  case  of  mule-back  transportation,  heavy  rains  make 
such  muddy  roads  that  it  is  an  impossibility  to  have  the  goods  taken 
to  the  port  of  shipment. 

Those  inconveniences  are  unknown  to  the  American  merchant 
whose  country  is  blessed  with  railroads,  canals  and  rivers,  and  lake 
steamers.  Therefore  I  must  emphasize  that  the  only  way  to  be  suc- 
cessful in  getting  the  South  American  trade  lies  in  the  practice  and 
the  learning  through  object  lessons  of  what  can  not  be  learned  by 
lectures  or  travelogues.  The  Government  of  the  United  States  has 
given  a  very  fine  example  of  its  good  will  toward  this  end,  as  shown 
by  the  results  of  the  trip  made  through  some  of  the  South  American 
countries  by  the  special  agent  of  the  Department  of  Commerce,  Mr. 
W.  A.  Graham  Clark.  He  brought  samples  of  manufactured  articles 
used  in  those  countries  in  order  to  show  the  American  manufacturers 
how  they  have  to  conform  to  the  wants  and  other  requirements  of 
those  markets. 

Now  it  is  up  to  the  merchant  and  manufacturer  of  the  United 
States  to  go  and  see  for  themselves  everything  related  to  their  busi- 
ness, the  conditions  of  the  country,  their  people  and  tradesmen,  in 
order  to  arrange  their  methods  accordingly,  tending  toward  the 


666  PAN  AMERICAN   FINANCIAL  CONFERENCE. 

establishment  of  sound  and  profitable  connections.  The  personnel 
of  this  investigating  corps  should  not  be  guided  by  a  mercenary 
spirit,  and  all  of  their  members  should  be  business-trained  gentle- 
men of  sound  judgment  and  pleasing  personality.  In  my  estimation 
enough  opinions  and  theories  have  been  expounded  and  now  it  re- 
mains only  to  go  ahead  and  do  it  properly. 

The  business  associations  of  the  United  States  are  wealthy  enough 
to  be  able  to  spend  a  few  thousand  dollars  in  a  practical  study,  and 
secure  the  results  similar  to  those  already  appearing  in  the  report 
submitted  by  the  competent  agent  sent  by  the  Department  of  Com- 
merce of  the  United  States. 

The  extensive  coast  line  and  splendid  ports  of  Venezuela  have 
always  been  a  great  asset  in  Venezuela's  commerce. 

Transportation  facilities  with  the  United  States  are  available  with 
the  present  operation  of  the  following  steamship  lines :  Red  D  Line 
(American),  Royal  Dutch  &  West  India  Mail  Co.,  Trinidad  Line, 
Scandella  Line.  There  is  also  an  irregular  service  of  chartered 
steamers  and  sailing  vessels  employed  by  various  American  indus- 
trial enterprises  in  Venezuela  for  the  outlet  of  their  products,  such 
as  asphalt,  magnesite,  etc.  German  and  British  lines  also  take  thou- 
sands of  tourists  to  Venezuela  during  the  cruising  winter  months. 

Although  commerce  with  Venezuela  has  increased  considerably, 
especially  since  January  of  the  current  year,  and  notwithstanding 
the  well-known  fact  that  the  European  war  has  placed  a  serious 
damper  on  shipping  in  general,  I  may  state  that  it  is  due  to  the  ex- 
istence of  an  American  line  of  steamships — which  in  normal  times 
takes  about  80  per  cent  of  the  freight  to  Venezuela — that  we  have 
not  suffered  so  many  inconveniences  in  this  particular  as  other 
countries  have. 

While  Venezuela  has,  on  the  average,  about  nine  different  mail  de- 
partures from  New  York  every  month,  which  include  the  parcel- 
post  service,  no  money-order  service  exists  with  the  United  States. 

Permit  me  to  state,  in  conclusion,  that  my  task  in  lending  my 
modest  effort  to  this  important  conference  would  be  incomplete 
without  a  few  paragraphs  taken  from  the  annual  report  of  the  min- 
ister of  finance,  Dr.  Roman  Cardenas,  submitted  to  the  Venezuelan 
Congress  in  April  last,  and  which  may  fittingly  apply  in  a  general 
way  to  the  various  matters  to  be  discussed  by  this  conference.  They 
will  be  found  in  the  following  appendix,  together  with  an  article 
published  by  an  American  traveler  (Mr.  L.  Elwyn  Elliot)  in  an 
American  magazine  of  last  month,  in  which  he  depicts  in  an  un- 
biased manner  the  true  conditions  of  Venezuela  at  the  present  time. 
Some  figures  are  also  given  regarding  Venezuelan  trade  and  exports 
from  New  York  to  Venezuelan  ports. 

PEDRO  RAFAEL  RINCONES. 


APPENDIX. 
I.  Historical. 

The  family  of  George  Washington  appointed  General  Laf  a}^ette  to 
deliver  to  the  liberator,  Simon  Bolivar,  a  medallion  having  a  por- 
trait of  Washington,  also  containing  a  lock  of  hair  of  the  modern 
Cincinnatus,  and  ornamented  with  the  following  inscription: 

Auctoris  libertatis  Americans  in  Septentrione  hanc  imagiuem  dat  filius  ejus 
(Pater  Patrise)  adoptatus  illi  qui  gloriani  siruilem  in  Austro  adeptus  est. 

Or, 

This  picture  of  the  Author  of  Liberty  in  North  America  is  presented  by  the 
Adopted  Son  (of  the  Father  of  his  country)  to  Him  who  reached  similar  glory 
in  South  America. 

General  Lafayette  wrote  to  the  liberator  the  following  letter : 

Hr.  PRESIDENT  LIBERATOR  :  My  religious  and  filial  affection  to  the  memory  of 
Gen.  Washington  could  not  have  been  better  appreciated  by  his  family.  I  have 
been  charged  to-day  with  a  very  honorable  task.  In  recognizing  the  exact  like- 
ness of  the  picture  I  feel  happy  to  think  that  my  paternal  friend,  in  choosing 
among  living  men  and  even  among  those  belonging  to  history,  would  have  pre- 
ferred to  present  it  to  Gen.  Bolivar.  What  more  could  I  say  to  the  great 
citizen  who  has  been  hailed  by  South  America  as  her  liberator  and  confirmed 
as  such  by  the  world,  whose  influence,  being  at  par  with  his  unselfishness, 
carries  in  his  heart  the  love  for  liberty  without  reserve  and  that  of  his  country 
in  all  its  purity?  However,  the  public  testimonials  of  your  benevolence  and 
esteem  enable  me  to  extend  to  you  my  personal  congratulations  as  a  veteran 
of  the  common  cause  who  is  about  to  leave  for  another  continent  and  who  will 
follow  with  his  wishes  the  glorious  crowning  of  your  task  and  that  solemn 
assembly  at  Panama,  where  all  the  principles  and  all  the  interests  of  the  inde- 
pendence of  America  shall  be  completed  and  consolidated. 

Please  accept,  Mr.  President  Liberator,  the  homage  of  my  respectful  ad- 
miration. 

LAFAYETTE. 

Bolivar's  reply  to  General  Lafayette  was  as  follows  : 

GENERAL:  I  have  had  the  honor  to  see  for  the  first  time  the  priceless  auto- 
graph of  that  beneficent  hand  of  the  New  World.  I  owe  this  honor  to  Col. 
Mercier,  who  delivered  to  me  your  esteemed  letter.  I  have  been  apprised 
with  inexplicable  rejoicing  that 'you  have  honored  me  with  a  most  valuable 
treasury  from  Mount  Vernon :  Washington's  portrait,  some  of  his  venerable 
remains,  and  one  of  the  monuments  of  his  glory  presented  to  me  through  your 
medium,  on  behalf  of  the  brothers  of  the  great  citizen,  the  first  born  of  the 
New  World. 

There  are  no  words  with  which  to  express  all  the  worth  that  this  present  and 
its  glorious  considerations  have  in  my  heart.  Washington's  family  is  honoring 

667 


668  PAN  AMERICAN   FINANCIAL  CONFERENCE. 

me  beyond  my  most  imaginary  expectations,  because  Washington,  presented  by 
Lafayette,  is  the  crowning  of  all  human  recompenses.  He  was  the  noble  pro- 
tector of  social  reforms  and  you  the  heroic  citizen ;  the  athlete  of  liberty,  who 
served  America  with  one  hand  and  the  Old  Continent  with  the  other.  Ah, 
what  mortal  could  deserve  the  honors  bestowed  upon  me  by  you  and  Mount 
Vernon ! 

My  confusion  is  equal  to  the  immensity  of  my  gratitude  which  I  offer  to 
you,  together  with  the  respect  and  veneration  that  every  man  owes  to  the 
Nestor  of  Liberty. 

With  the  greatest  consideration,  I  am,  your  respectful  admirer, 

BOLfVAR. 

II . — Financial. 

From  the  annual  report  of  the  minister  of  finance,  Dr.  Roman 
Cardenas,  submitted  in  April  last  to  the  present  Venezuelan  Con- 
gress, the  following  paragraphs  are  quoted  as  bearing  some  relation 
to  certain  questions  to  be  discussed  by  the  Pan- American  Financial 
Conference,  viz: 

The  national  budget  of  income  and  expenditures  is  the  immediate  prognosis 
of  a  fiscal  year,  for  it  is  prepared  shortly  before  it  is  enforced.  For  its  basic 
foundation  it  has  the  data  of  the  previous  budget  and  the  current  information 
accumulated  daily  by  the  division  of  the  treasury.  When  the  project  is  con- 
cluded the  fiscal  year  is  not  yet  ended,  and  it  is  only  three  months  later  when 
the  division  of  accounts  may  present  the  final  statement  of  the  treasury  and 
the  balances  to  be  paid  or  collected  for  the  next  budget. 

When  this  provision,  notwithstanding  its  continuity,  is  absolutely  impossible 
to  carry  out,  due  to  certain  events,  the  remoteness  of  which  could  not  enter 
into  the  calculations  of  the  administration,  the  Government  is  obliged  to  solve 
the  problem  of  a  sudden  increase  of  expenditures  or  a  rapid  and  excessive 
decrease  in  revenues. 

Such  has  been  the  case  we  have  seen  in  the  practice  with  the  budget  covering 
the  fiscal  year  of  1914-15.  The  budget  established  the  probable  revenues 
according  to  the  previous  year  of  1913-14,  which  showed  a  diminution  in 
revenues.  The  latter,  however,  were  sufficient  in  the  normal  course  of  events 
to  cover  the  expenditures  specified  in  the  budget.  The  fiscal  process  of  the 
new  budget  had  begun  to  take  its  course  when  the  European  war  broke  out. 

As  it  is  well  known,  75  per  cent  of  the  national  revenues  are  constituted  by 
customs  receipts,  and  the  latter,  due  to  the  sudden  paralysis  of  our  commerce 
with  the  European  centers,  was  to  suffer  a  considerable  decrease,  which  would 
have  completely  destroyed  the  budget  system,  thus  exposing  the  normal  course 
of  the  administration  to  discomposure  and  misgivings.  It  was  therefore  very 
urgent  to  adopt  measures  to  counteract  this  imminent  disturbance  of  the 
treasury  while  a  study  was  being  made  of  the  incoming  revenues,  thus  allowing 
a  detailed  estimate  to  be  made  of  the  various  elements  involved  in  such  a 
grave  question. 

This  was  the  spirit  which  animated  the  decree  enacted  on  August  27,  1914, 
ordering  a  reduction  of  the  personnel  in  the  Government  offices  and  a  decrease 
by  25  per  cent  of  Government  salaries  and  other  appropriations.  But  the  rapid 
decrease  of  the  customs  revenues  in  the  months  of  September  and  October  fol- 
lowing, and  the  seriousness  of  the  war — the  duration  of  which  could  not  be 


MEMORANDUM   BY  VENEZUELA.  669 

foreseen — demonstrated  that  the  question  had  to  be  solved  according  to  the 
needs  of  the  moment  and  also  bearing  in  mind  the  safeguard  of  the  future. 
Therefore  a  formal  revision  of  the  budget  was  undertaken  which  included  each 
and  every  one  of  its  items. 

Three  remedies  were  at  hand  before  the  Government,  in  facing  such  a  crisis, 
which  could  maintain  the  normal  course  of  the  administration,  so  as  not  to 
impair  the  obligations  of  Venezuela's  public  credit:  Immediate  reduction  of 
expenditures,  increase  of  duties  and  taxes,  and  a  loan  issue. 

In  our  economic  system  all  taxes  are  paid  by  the  people.  Customs  duties, 
which  in  other  countries  is  paid  by  the  foreigner,  who  is  obliged  to  struggle 
with  national  competition,  is  being  paid  here  by  the  consumer  with  the  addition 
of  high  transportation  charges.  Pie  pays  for  it  with  staple  products  which 
must  compete  in  foreign  markets  with  an  abundance  of  similar  products  of  other 
countries. 

Therefore,  to  increase  the  customs  duties,  the  only  one  to  choose  froin — for  the 
increase  of  internal  revenues  would  have  been  insignificant — meant  to  triple  the 
cost  of  commodities,  already  high  enough  on  account  of  the  scant  production, 
due  to  the  war,  and  would  have  caused  the  ruin  of  our  trade,  placing  poverty 
at  the  door  of  all  social  classes. 

The  issue  of  a  foreign  loan — as  an  internal  loan  would  have  taken  some  years 
to  cover  it — was  not  only  impossible  to  undertake,  as  it  would  have  been  an 
exception  in  our  favor  by  countries  needing  funds  for  themselves,  but  it  also 
would  have  been  essentially  objectionable,  for  it  would  have  increased  the 
obligations  of  the  State,  which  have  already  weighed  for  so  long  upon  the  nation, 
thus  retarding  its  progress  and  creating  serious  duties  for  those  who  are  in- 
trusted with  the  safeguard  of  national  existence. 

The  only  action  remaining,  involving  less  consequential  hardship,  was  the 
elimination  of  commissions  and  public  charges  and  the  reduction  of  personnel 
and  salaries. 

It  was  a  sacrifice  for  those  more  intimately  in  touch  and  conversant  with 
the  responsibility  of  the  administration,  who  have  common  moral  interests  with 
the  Government  they  serve  and  support  in  the  service  of  public  welfare. 

In  accordance  with  the  foregoing  the  budget  of  November  7,  1914,  was 
decreed  and  immediately  enforced.  This  measure  has  yielded  the  results  to 
be  obtained  with  any  plan  directed  toward  the  well-being  of  the  people,  for 
Venezuela  will  be  able  not  only  to  maintain  its  economical  stability  while 
the  European  war  lasts  but  in  the  midst  of  the  present  international  com- 
plications has  been  able  to  maintain  also  its  credit,  thus  deserving  the  com- 
mendation of  being  an  exception  in  the  general  crisis  due  to  the  punctuality 
with  which  it  has  met  and  shall  continue  to  meet  its  obligations. 

******* 

Notwithstanding  very  many  moral  and  pecuniary  obstacles,  the  credit  of 
Venezuela  has  reached  such  a  high  standard — due  to  the  punctuality  with 
which  it  has  fulfilled  its  obligations  with  regard  to  the  internal  and  external 
debt — that  its  obligations  do  not  need  to  be  indorsed  but  with  the  faith  of  its 
word.  Consequently  the  Government  of  the  Republic  must  persevere  in  its 
purpose  of  eliminating  all  acts  calling  for  a  pledge  or  guaranty. 


670  PAN  AMERICAN   FINANCIAL-  CONFERENCE. 

III. — General. 

Taken  from  the  Pan  American  Magazine,  April,  1915  (article  by 
L.  Elwyn  Elliot).  Review  of  various  South  American  countries. 

VENEZUELA. 

For  the  last  four  years  Venezuela  has  been  in  the  agreeable  position  of  pos- 
sessing a  substantial  surplus  of  national  revenue  over  expenditure,  and  as 
a  part  of  this  ready  cash  has  been  preserved  in  the  country's  exchequer  no 
doubt  it  will  assist  in  tiding  over  such  financial  disintegration  as  resulted 
from  the  European  war  outbreak. 

Since  the  year  1910  this  surplus  has  varied,  but  there  has  always  been  an 
addition  to  the  national  fund ;  in  1912  it  amounted  to  nearly  $2,500,000  gold. 

During  the  same  period  of  prosperity  the  import  and  export  lists  also  soared 
into  unprecedented  figures,  indicative  of  a  time  of  expansion  of  industries.  In 
the  year  1913  the  total  foreign  trade  amounted  to  nearly  $50,000,000  in  value, 
divided  between  exports  worth  about  $30,000,000  and  imports  costing  $20,- 
000,000;  here  again  Venezuela  is  in  the  fortunate  position  for  having  con- 
sistently outbalanced  her  purchases  by  her  sales. 

These  sales  are  all  agricultural,  and  the  two  main  export  items  are  cocoa 
and  coffee.  Last  year,  however,  the  coffee  crop  was  both  scant  in  quantity 
and  less  fine  in  quality,  so  that  a  drop  in  value  is  to  be  expected  in  this  im- 
portant item.  Cocoa  may  do  well  in  realizing  prices  if  Venezuela  has  been 
able  to  get  her  product  to  market  in  time  to  take  advantage  of  European  de- 
mand arising  after  August  for  army  use. 

A  feature  of  the  last  few  years'  development  has  been  the  growing  im- 
portance of  Ciudad  Bolivar,  placed  upon  the  banks  of  the  Orinoco  River  in 
such  a  position  that  it  taps  some  of  the  deep  forestal  regions  which  could  have 
no  other  outlet.  With  improved  steamer  connections  this  riverine  port  has 
been  able  recently  to  greatly  increase  its  output  of  raw  rubber,  or  rather 
balata,  chicle  chewing  gum,  aigrettes  and  heron  plumes,  and  tonka  beans. 

All  of  the  feather  exports  have  gone  to  Europe,  since  their  sale  has  been 
prohibited  in  the  United  States,  but  the  amount  has  not  been  lessened ;  the  trade 
has,  however,  been  rendered  a  little  nervous  in  the  past  months  by  the  pro- 
jected passage  of  the  plumage  bill  by  the  British  Parliament,  which  would 
have  the  effect  of  excluding  many  of  these  feathers  from  the  English  market. 

The  chief  trade  of  Venezuela  has  been  for  some  years  with  the  United  States, 
the  northern  Republic  taking  about  $10,000,000  worth  and  selling  to  Venezuela 
about  $6,000,000  worth  of  goods  in  the  last  year,  for  which  complete  figures 
are  not  available,  1913. 

Commerce  with  Great  Britain  amounts  to  about  $5,500,000,  three-fourths  of 
this  sum  being  sales  of  British  goods  to  Venezuela. 

Railroad  extension  will  probably  be  somewhat  delayed  by  European  affairs, 
and  the  completion  of  the  Venezuelan  Central  Line  may  be  among  the  suf- 
ferers. There  are  three  other  British  lines  in  the  Republic,  with  a  total  length 
of  about  170  miles,  representing  a  capital  of  about  $14,000,000. 

Notable  developments  of  the  year  1914  were  made  in  the  Maracaibo  Lake 
region,  where  at  least  three  new  sugar  estates  were  operating  with  vigor  and 
expecting  to  commence  production  during  the  present  year.  There  was  great 
activity  in  the  importation  of  machinery  in  this  fertile  section  of  the  country, 
where  resources  have  been  for  a  long  time  more  or  less  concealed  behind  the 
narrow  and  inhospitable  entrance  to  the  so-called  lake. 


MEMORANDUM   BY  VENEZUELA.  671 

On  the  same  shores,  on  the  northwest,  a  coal  and  oil  company  has  also  been 
exploring  and  operating,  with  excellent  prospects.  The  writer  is  exceedingly 
sanguine  about  the  future  of  this  remarkable  area. 

The  fortunes  of  Puerto  Cabello  do  not  appear  to  have  improved  during  the 
year.  The  port  of  La  Guaira  remains  as  ever  the  chief  channel  of  commerce 
to  the  interior,  dominated  by  the  charming  capital,  Caracas,  and  there  has  been 
noticeable  growth  in  the  suburban  water  place,  Macuto. 

In  internal  affairs  Venezuela  was  in  a  state  somewhat  resembling  suspense 
during,  at  any  rate,  the  first  six  months.  There  were  one  or  two  abortive 
attempts  at  revolution,  and  the  firm  hand  of  Gen.  Gomez,  who  resigned  the 
Presidency  early  in  the  year  in  order  to  be  eligible  as  a  candidate  for  reelection, 
had  to  be  exerted  to  prevent  the  contagion  from  spreading. 

The  feeling  of  uncertainty  tended  to  retard  enterprise  to  a  certain  extent, 
and,  in  common  with  her  neighbors,  Venezuela  will  probably  husband  her  re- 
sources during  the  present  year.  She  has  punctually  met  her  monetary  obliga- 
tions abroad;  in  addition  to  payments  of  the  public  interest,  she  has  reduced 
the  outstanding  amount  through  the  operation  of  a  sinking  fund.  There  has 
been  some  complaint  from  foreign  creditors  on  the  failure  up  to  the  end  of  the 
year  to  settle  the  arrears  of  the  Puerto  Cabello  &  Valencia  Railway;  but  this 
is  a  matter  which  may  have  received  due  attention  by  the  time  of  publication, 
and  there  is  no  doubt  of  the  ability  of  the  Republic  to  meet  the  obligation. 

Mining  in  Venezuela  displayed  some  promising  aspects  during  the  year.  The 
Yuruari  district  was  again  to  the  fore  with  important  new  discoveries  of  gold, 
and  if  full  advantage  is  not  taken  of  the  mines  located  the  reason  will  prob- 
ably lie  with  lack  of  transportation  to  the  coast,  either  by  road  or  rail. 

In  the  State  of  Miranda  there  is  every  hope  for  rapid  development  of  copper 
mining,  and,  although  the  iron  mines  of  Imataca  were  reported  closed  down  at 
the  end  of  the  year,  later  information  seems  to  predict  the  reopening  of  these 
works  when  brighter  times  come. 

IV.— Statistical. 

General  trade  of  Venezuela  during  the  fiscal  year  1013-14. 

Bolivars. 

United  States 76,  528,  734.  81 

France - 49,  437,  207.  97 

Germany 34,  040,  207.  53 

Great  Britain 31,  726,  634.  54 

Netherlands 13,  249,  277.  01 

Spain 9,  530,  641.  94 

Italy 3,  736,  746.  35 

Colombia 2, 460,  425.  84 

Austria-Hungary 2,  266,  375.  50 

Belgium I 1, 421,  293.  30 

Cuba__ 73, 146.  60 

Panama 20,903.00 

Denmark 8,  800.  00 

Ecuador—  2,  850.  00 


Total  trade 224,  503,  244.  39 


672  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

Exports  from  the  port  of  New  York  to  Venezuela. 
Years :  Bolivars. 

1909 16, 122,  223 

1910 20,  083,  974 

1911 21,  349,  111 

1912 33,  033, 407 

1913 33,  326,  562 

1914 30,  388,  486 

The  decrease  of  exports  in  1914  as  compared  with  the  previous  year  was  due 
to  the  apparent  collapse  of  business  during  the  months  of  August,  September, 
and  October  following  the  outbreak  of  the  European  war. 

Business,  however,  has  rapidly  increased  in  volume,  especially  since  January 
of  the  current  year,  and  at  this  writing  such  an  increase,  which  is  estimated 
at  from  20  to  25  per  cent  over  that  of  last  year,  is  plainly  demonstrated  by  the 
fact  that  steamship  companies  doing  business  with  Venezuela  are  at  the  present 
time  taxed  to  their  overload  capacity  in  taking  care  of  the  American  freight  to 
Venezuelan  ports. 

PEDRO  RAFAEL  RINCONES. 


MEMORANDUM  SUBMITTED  BY  JOHN  CLAUSEN, 

MANAGER  FOREIGN  DEPARTMENT,  CROCKER 

NATIONAL  BANK  OF  SAN  FRANCISCO,  AND 

SPECIAL  REPRESENTATIVE  OF  THE 

SAN  FRANCISCO  CHAMBER 

OF  COMMERCE 


98257°— 15 43  673 


MEMORANDUM  SUBMITTED  BY  JOHN  CLAUSEN,  MANAGER  FOR- 
EIGN DEPARTMENT,  THE  CROCKER  NATIONAL  BANK  OF  SAN 
FRANCISCO. 


In  the  interest  of  merchants  and  bankers  of  California  I  take  the 
liberty  of  submitting  for  your  kind  consideration  the  following 
matters  pertaining  to  trade  relations  with  Central  and  South 
America,  with  such  comments  as  seem  pertinent  thereto : 

STATEMENT  AS  TO  THE  OUTLOOK  FOR  THE  YEAR  1915  FROM  A  FOREIGN 
TRADE  STANDPOINT  AND  WHAT  EFFECT  THE  OPENING  OF  THE  PANAMA 
CANAL  AND  THE  EUROPEAN  WAR  HAVE  HAD  UPON  THE  SEA-BORNE 
COMMERCE  OF  THE  PORT  OF  SAN  FRANCISCO. 

EFFECT   OF   THE    PANAMA    CANAL. 

Taking  the  first  four  months  of  1915,  as  compared  with  the  same 
period  of  1914,  the  canal  has  in  a  general  way  been  of  great  value  to 
the  port  of  San  Francisco,  and  detrimental  in  some.  The  value  of 
shipments  from  San  Francisco  to  the  Atlantic  coast  for  the  period 
vstated  is  as  follows: 

Via  Tehnantepec  &  Panama  Railroad  1914 $4,  350,  Til 

Via  Panama  Canal  1915 7,914,535 


Increase  of 3,  563, 824 

or  nearly  double  as  a  consequence  of  the  opening  of  the  Canal. 

This  does  not  necessarily  mean  that  the  additional  amount  of 
tonnage  moved,  but  it  does  represent  a  large  increase  and  a  very 
material  saving  in  freight  rates. 

The  shipments  by  sea  from  San  Francisco  to  Europe  during  the 
first  four  months  of  1914  and  1915  increased  $8,684,972,  or  472  per 
cent,  which  would  not  have  been  possible  had  the  canal  not  been  in 
operation.  On  the  other  hand  the  shipments  to  Asia  show  a  con- 
siderable decrease,  caused  by  cotton  being  shipped  direct  from  Gulf 
ports  and  shipments  being  made  from  the  Atlantic  which  heretofore 
were  transported  to  the  Pacific  coast  and  reshipped  from  San 
Francisco. 

The  canal,  by  enabling  the  Atlantic  coast  to  reach  the  west  coast 
of  South  America  without  transfer,  has  also  taken  away  considerable 
tonnage  heretofore  shipped  from  San  Francisco. 

675 


676  PAN   AMERICAN   FINANCIAL  CONFERENCE. 

EFFECT  OF  THE  EUROPEAN  WAR. 

The  European  war  has,  like  the  Panama  Canal,  benefited  and 
injured  this  port.  It  has,  as  shown  above,  largely  increased  the 
commerce  from  this  port  in  some  lines,  whereas  in  others  materially 
reducing  them.  It  has  created  a  shortage  of  vessels  and  increased 
charter  prices  and  rates  so  that  the  available  ship  tonnage  from  the 
Pacific  coast  is  entirely  inadequate  to  handle  the  commerce  which 
could  be  secured.  After  the  war  is  over  all  indications!  point  to  a 
large  influx  of  immigrants  from  Europe  and  an  unprecedented  ex- 
port to  Europe  and,  naturally,  ships  will  be  more  easily  procured. 

EXPORTS  FROM  SAN  FRANCISCO. 

For  the  first  four  months  of  1915  and  1914  the  exports  of  San 
Francisco  were  as  follows: 

Total  exports  first  four  months  of  1914 $18,  296,  803 

Total  exports  first  four  months  of  1915 28,224,121 

Increase  of 9, 927, 318 

or  over  $107,955  increase  per  day. 
This  was  divided  as  follows : 


To  Europe: 

First  four  months  of  1914 1,  839,  398 

First  four  months  of  1915__  10,  524,  370 


Increase 8,  684,  972 

To  Central  America : 

First  four  months  of  1914 851,429 

First  four  months  of  1915 1,207,344 


Increase 355^  915 

To  South  America : 

First  four  months  of  1914 1,253,252 

First  four  months  of  1915 549,373 


Decrease 793,  879 

To  Australia  and  Ne.w  Zealand : 

First  four  months  of  1914 if  793,  §53 

First  four  months  of  1915 3,  705, 141 


Increase 2, 016,  28S 

To  Asia : 

First  four  months  of  1914 8,  423,  939 

First  four  months  of  1915 _.  7,  542, 058 


Decrease 881,  881 


To  Philippines: 

First  four  months  of  1914 2,012,154 

First  four  months  of  1915 2,  956,  052 


Increase ^ 943,  898 


MEMORANDUM   BY   JOHN   CLAUSEN.  677 

From  the  foregoing  it  will  be  seen  that  our  trade  with  Central 
America  increased,  principally  because  of  the  fact  that  the  United 
States  bought  large  quantities  of  their  products  and  they  therefore 
obtained  American  credit  against  which  purchases  were  effected  in 
this  country. 

South  America,  on  the  other  hand,  shows  a  decrease  both  because 
of  financial  conditions  and  because  of  the  lack  of  steamship  service. 

Australia  and  New  Zealand  show  increase  and,  with  better  steam- 
ship service,  would  show  a  still  further  gain. 

Asia  shows  a  decrease  caused  almost  entirely  from  the  fact  that 
the  exports  of  cotton  to  Japan  were  very  much  less  this  year  and 
because  a  large  proportion  of  that  which  was  shipped  went  direct 
from  Gulf  ports. 

The  Philippines  show  a  large  increase  and  this  would  have  been 
still  larger  had  there  been  better  steamship  facilities. 

Taking  the  above  facts  and  figures  as  a  basis  it  would  appear  that 
the  year  1915,  from  a  foreign  trade  standpoint,  should  be  unpre- 
cedented in  the  history  of  this  State. 

STEAMSHIP   SERVICE. 

It  is  reported  that  owing  to  the  "  seaman's  bill "  the  Pacific  Mail 
Steamship  Co.  will  have  to  discontinue  its  oriental  service,  leaving 
absolutely  no  steamship  connection  between  San  Francisco  and  the 
Orient  except  the  Japanese  Line — the  Toyo  Kisen  Kaisha,  which 
line  will  naturally  increase  its  rates,  thereby  depriving  California  of 
an  opportunity  to  participate  in  the  commerce  with  the  Orient. 

Owing  to  the  heavy  fixed  charges  of  the  Pacific  Mail  Steamship 
Co.,  when  their  oriental  service  is  discontinued  it  will  be  impossible 
for  them  to  continue  their  Central  American  line,  in  view  of  the  fact 
that  present  laws  prohibit  their  operating  through  the  canal.  It 
therefore  leaves  California  destitute  of  service  to  Central  America, 
the  east  coast  of  South  America,  and  European  ports,  with  the  ex- 
ception of  Great  Britain. 

UNIFORM  CONSULAR  INVOICES. 

At  the  present  time  each  Latin  American  country  has  a  separate 
and  distinct  consular  invoice.  If  a  uniform  consular  invoice  could 
be  adopted  which  would  embody  the  requirements  of  each  Bepublic, 
but  which  could  be  utilized  for  all,  it  would  be  of  material  assistance 
to  our  exporters,  and  if  the  Central  and  South  American  delegates 
would  consent  to  the  adoption  of  such  a  form,  the  San  Francisco 
Chamber  of  Commerce  would  gladly  prepare  the  proposed  blank  for 
their  joint  approval  to  be  ratified  by  their  respective  Governments. 


678  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

LATIN  AMERICAN  IMPORT  DUTIES. 

Another  subject  which  the  San  Francisco  Chamber  of  Commerce 
desires  taken  up  for  reconsideration  is  that  of  import  duties,  in  the 
hope  of  securing  a  lower  rate  than  that  now  in  effect. 

Efforts  to  introduce  our  products  into  Latin  American  countries 
have  continued  for  many  years,  but  we  find  no  material  development, 
owing  to  the  high  cost  to  the  ultimate  consumer.  This  high  cost  arises 
largely  from  the  excessive  import  duties  and,  customhouse  charges. 
In  Argentina  these  charges  approximate  three  times  the  f.  o.  b. 
value  of  the  goods,  and  more  than  twice  the  c.  i.  f.  value,  so  far  as 
most  of  the  canned  foods  varieties  are  concerned.  Conditions  in 
Brazil  are  even  more  onerous.  Canned  tomatoes  of  the  standard  2J- 
Ibs.-size  which  retail  in  this  country  for  8  to  10  cents  per  tin  retail  for 
approximately  $1  United  States  gold  in  Bio  de  Janeiro.  Canned 
asparagus  retails  in  this  country  at  20  to  25  cents  per  tin,  and  retails 
in  Rio  de  Janeiro  at  $1.33  United  States  gold.  These  figures  may 
be  verified  by  the  very  extensive  investigations  which  have  been  con- 
ducted by  the  Department  of  Commerce  and  by  the  figures  published 
in  the  department's  report.  The  Department  of  State  has  made  every 
effort  to  secure  more  friendly  action  in  these  countries  through  diplo- 
matic correspondence,  but  we  are  forced  to  the  conclusion  that  noth- 
ing can  be  accomplished  along  these  lines. 

While  it  is  true  that  these  Eepublics  are  importing  more  canned 
foods  from  European  countries  than  from  the  United  States,  the 
fact  remains  that  the  total  imports  are  very  small  as  compared  with 
the  population.  At  the  present  time  the  revenues  derived  are  not 
so  large  as  they  would  be  if  more  favorable  tariffs  were  assessed. 
The  total  importation  would  increase  to  such  an  extent  as  to  augment 
their  revenues,  even  with  the  lower  tariff  that  would  be  adequate  for 
any  theory  of  protection  for  home  industries,  actual  or  prospective. 
Our  correspondents  in  the  Latin  American  countries  advise  that 
there  is  considerable  complaint  on  account  of  the  high  cost  of  living, 
and  we  would  respectfully  submit  that  if  they  would  reduce  their 
tariffs  to  a  reasonable  level  these  Governments  would  not  only  in- 
crease their  revenues,  but  would  give  the  masses  of  the  people  a 
cheap,  attractive,  convenient,  nutritious  and  wholesome  article  of 
food,  tending  to  reduce  their  present  high  cost  of  living. 

In  view  of  the  fact  that  we  are  admitting  the  important  articles  of  ex- 
port from  these  countries  free  of  duties,  it  is  hoped  that  some  reciprocal 
action  will  be  promoted  on  the  part  of  the  Latin  American  countries. 

TRADE  DEVELOPMENT  WITH  CENTRAL  AND  SOUTH  AMERICA. 

The  most  serious  problems  which  at  present  confront  us  in  pro- 
moting our  trade  with  Latin  America  are : 

First.  The  absence  of  adequate  banking  and  shipping  facilities, 
organized  to  advance  American  interests. 


MEMORANDUM   BY   JOHN   CLAUSEN.  679 

Second.  The  absence  of  adaption  on  the  part  of  our  manufacturers 
and  merchants,  and  last,  but  not  least,  the  lack  of  trained  commercial 
men  to  do  the  necessary  missionary  work.  The  universal  clamor  of 
our  merchants  for  banking  facilities  in  foreign  countries,  more  par- 
ticularly in  Central  and  South  America,  is  well  founded,  and  banks 
throughout  the  country  should  take  early  heed  to  establish  suitable 
connections  in  order  to  adequately  care  for  the  requirements  of  their 
clients. 

If  we  wish  to  conquer  foreign  markets,  we  must  necessarily  meet 
their  needs,  and  it  can  not  be  too  strongly  emphasized  that  unless  our 
commercial  houses  approach  intended  customers  in  terms  with  which 
they  are  familiar  time  and  energy  will  be  wasted  and  result  only  in 
misdirected  and  fruitless  efforts. 

The  best  man  in  a  business  concern  is  the  only  right  one  to  influ- 
ence trade  opportunities,  such  as  have  been  suddenly  offered  to  us 
by  the  misfortune  of  the  great  industrial  nations  of  the  world,  and 
if  our  business  leaders  wish  reciprocal  trade,  they  must  not  send  rep- 
resentatives with  only  slight  knowledge  of  ethics  in  business,  but 
rather  men  of  the  broadest  experience,  able  to  cope  with  the  problems 
presented.  Success  in  any  one  line  or  for  any  one  man  means  pros- 
perity for  several  others,  and  it  is  therefore  not  so  essential  that 
every  merchant  or  manufacturer  here  should  engage  in  the  foreign 
trade,  as  long  as  those  who  do  not  are  willing  to  afford  their  moral 
support  in  a  move  that  ultimately  will  redound  to  the  benefit  of  all. 

In  this  country  the  economic  effects  of  the  European  war  have 
probably  reached  their  most  serious  aspects,  and  business  is  again 
settling  down  into  almost  normal  lines.  We  are  just  beginning  to 
recognize  the  possibilities  offered  for  expansion  of  trade  with  foreign 
countries,  and  while  the  Panama  Canal  has  opened  for  us  a  great  new 
trade  route — which  we  are  prone  to  believe  will  ultimately  place  our 
country  in  a  position  to  command  the  greater  share  of  the  Latin- 
American  trade — we  must  not  be  illusionized,  as  unless  we  are  able 
to  adequately  finance  our  contemplated  negotiations  a  good  part  of 
the  capital  invested  for  the  construction  of  the  great  canal  will  be 
wasted  and  our  competing  neighbors  in  Europe  will  reap  the  benefits 
of  our  undertaking. 

It  is  a  recognized  fact  that  the  American  merchant  has  been  at  a 
disadvantage  in  regard  to  shipping  facilities,  and  this  has  proven  a 
great  handicap  in  building  and  picking  up  the  trade  which  is  now 
being  neglected  by  Europe.  To  afford  means  of  adequate  transporta- 
tion we  need  ships — an  American  merchant  marine — upon  which 
profitable  and  useful  commerce  so  much  depends. 

The  dislocation  of  financial  and  shipping  facilities — with  the  con- 
sequent falling  off  in  the  European  demand  for  the  most  valuable 
exports  from  the  Latin-American  countries — has  resulted  in  an 


680  PAN   AMERICAN    FINANCIAL   CONFERENCE. 

almost  complete  cessation  of  shipments  to  markets  that  formerly  ab- 
sorbed the  major  part  of  their  production,  which  loss  and  restriction 
of  outlets  has  tended  to  seriously  curtail  their  purchasing  power  as 
well. 

At  present  it  may  be  said  that  there  is  a  ready  market  in  South 
America  for  practically  all  classes  of  goods,  especially  manufactured 
articles,  and  the  commercial  intelligence  of  merchants  and  manufac- 
turers in  the  United  States  should  be  alive  to  the  opportunities  as 
compared  with  European  nations,  who,  owing  to  the  uncertainties 
of  the  war  and  its  duration,  are  temporarily  inactive  in  trade  which 
does  not  administer  directly  to  war. 

These  are  conditions  which  are  not  likely  to  alter  in  a  very  mate- 
rial measure,  unless  our  financial  machinery  is  prepared  to  extend 
its  operations  by  investing  freely  in  their  industrial  enterprises  as 
well  as  in  their  Government  loans. 

Success  lies  in  concentration — nothing  can  be  accomplished  in 
haste — which  is  particularly  true  in  dealing  with  countries  beyond 
our  own  borders,  and  while  we  hear  frequent  complaints  of  the  serious 
obstruction  to  trade  caused  by  the  existing  moratoria  and  other 
governmental  measures,  resulting  in  the  restriction  of  credits  and 
consequent  curtailment  of  working  capital,  there  is  no  real  reason 
why,  even  at  the  present  time,  the  same  financial  credit  arrangements 
which  Europe  heretofore  has  afforded  our  sister  Kepublics  can  not  be 
established  with  equal  satisfaction  in  their  dealings  with  merchants 
here.  In  our  business  relations  with  South  America  and  until  only 
a  few  months  ago  we  were  obliged  to  consider  the  pound  sterling, 
French  franc,  or  German  mark  as  the  basis  of  our  operations,  and 
the  United  States  dollar  as  an  exchange  medium  has  virtually  been 
an  unknown  quantity  to  the  merchant  and  our  financial  contem- 
poraries in  the  Southern  Hemisphere. 

When  we  now  consider  that  the  gold  par  value  of  the  three  prin- 
cipal exchanges  is  quoted  respectively  as  $4.86,656  for  pound  sterling, 
5.18,26  for  franc,  0.95,2852  for  reichmark,  and  that  during  the  last 
few  months  our  merchants  have  been  called  upon  to  effect  liquidation 
at  $5  to  $6  for  the  pound  sterling,  20  cents  (5.00)  for  the  French 
franc,  and  24.50  (0.98)  for  the  German  mark,  with  a  problem  be- 
fore us  of  an  equally  unjustified  decline  in  these  exchanges,  when 
banks  at  present  are  selling  the  pound  sterling  at  $4.78J,  francs  at 
5.40,  and  reichmarks  at  82  J,  it  would  prove  of  singular  concern  to 
the  commercial  interests  and  not  a  difficult  matter  to  convince  our 
southern  neighbors  that  the  time  is  opportune  for  making  the  United 
States  dollar  the  basis  of  future  transactions,  and  it  should  be  the 
earnest  endeavor  of  every  merchant  and  bank  in  our  country  to  give 
the  American  dollar  the  place  it  deserves  in  our  international  trade. 


MEMORANDUM  SUBMITTED  BY  THE  URUGUAYAN  DELEGATION 
AS  A  SUPPLEMENT  TO  ITS  GROUP  CONFERENCE  REPORT.* 


MARITIME  TRANSPORTATION. 

Resolved,  That  the  Conference  declare  the  advisability  of  assisting  the 
merchant  marine  of  all  American  countries  plying  between  ports  of  the  hemi- 
sphere, giving  the  same  franchises  in  order  to  place  it  on  equal  footing  with 
the  coasting-trade  shipping. 

(1)  The  registering  of  ships  shall  not  imply  heavy  expenses  and 
the  boats  may  be  acquired  anywhere  in  the  world  at  the  best  market 
price. 

(2)  No  conditions  shall  be  imposed  on  the  crews,  materials,  and 
technical  administration  of  the  ships  which  will  raise  the  price  of 
keeping  and  running  the  vessels,  paying  due  regard,  however,  to  the 
sanitary  requirements  and  safety  of  crews  and  passengers. 

(3)  Vessels  flying  American  flags  between  the  principal  ports  of 
North  and  South  America  to  pay  no  lighthouse  fees.     Port  duties 
to  be  reduced,  if  possible.     The  Conference  shall  suggest  to  local 
Governments  the  advisability  of  granting  those  franchises  in  ports 
administered  by  them. 

(4)  Vessels  plying  between  ports  of  both  Americas  shall  enjoy 
up  to  1925  the  freedom  of  registry  and  a  reduction  in  consular  fees 
for  a  term  of  five  years.    They  shall  pay  no  duties  or  fees  for  the 
shipping   and   clearance   documents   during   these   periods   of   five 
years. 

Non- American  ships  shall  enjoy  these  franchises  for  the  term  of 
five  years  if  registered  under  the  flag  of  one  of  the  American  coun- 
tries. These  franchises  to  be  lost  by  ships  applying  discriminating 
freight  rates  to  the  prejudice  of  other  companies  plying  on  the  same 
routes.  Foreign  companies  guilty  of  the  above-mentioned  discrimi- 
nation to  pay  double  the  amount  of  fees  and  duties  during  five 
years. 

The  foregoing  is  based  on  practical  experience.  President  Wilson 
has  stated  that  maritime  transportation  wrill  be  in  a  precarious  con- 
dition until  sufficient  ships  ply  between  the  ports  of  the  American 
hemisphere.  They  should  depart  and  arrive  at  fixed  dates  and  ofl'er 
every  conceivable  facility  for  transportation.  New  shipping  enter- 

*  This  supplement  contains  the  suggestions  of  the  Uruguayan  delegation  with  reference 
to  the  resolutions  which  in  their  opinion  should  be  considered  by  the  Conference  as  a 
whole  (see  p.  266). 

681 


682  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

prises  should  be  organized,  which  should  not  expect  large  profits  at 
the  beginning,  but  trust  to  the  future  for  substantial  returns,  based 
on  Government  assistance  and  franchises  accorded.  Capital  for 
shipping  enterprises  should  be  encouraged  by  every  conceivable 
means. 

The  conclusions  of  investigations  made  in  the  United  States  are 
responsible  for  the  advisability  of  reducing  the  cost  of  registering 
as  much  as  possible  and  for  having  demonstrated  the  high  cost  of 
registering,  equipment,  and  running  of  vessels  under  the  present 
maritime  regulations  of  the  United  States. 

It  is  true  that  all  countries  tiying  to  develop  their  merchant 
marine  have  also  kept  in  mind  the  interests  of  their  national  navy 
yards,  feeding  thus  an  industry  which  in  turn  eliminates  many 
others;  but  if  in  these  matters  conflicting  interests  be  considered,, 
those  connected  directly  or  indirectly  with  abundant  and  cheap  trans- 
portation should  prevail  over  any  others. 

The  reduction  or  the  abolition  of  port  dues  will  be  an  inducement 
to  capital  venturing  into  the  shipping  business  and  will  diminish  the 
speculative  nature  of  the  enterprise.  The  influence  of  good  and  cheap 
transportation  in  the  development  of  foreign  trade  is  obvious.  Great 
Britain  gave  the  world  the  most  striking  example  of  what  could  be 
done  in  this  direction.  France  only  succeeded  in  the  expansion  of 
her  international  trade  by  means  of  large  subsidies  and  other  fran- 
chises to  her  merchant  marines.  Germany  became  a  feared  competi- 
tor to  the  latter  countries  in  the  conquest  of  the  markets  of  the  world 
when  she  had  secured  for  herself  the  means  of  transporting  her  prod- 
ucts in  her  own  merchant  vessels. 

A  line  of  steamers  supplying  specific  traffic  is  a  transportation 
route  capable  of  creating  commerce  if  it  does  not  exist,  or  increasing 
it  if  it  is  already  established;  just  as  navigable  rivers  and  natural 
ports  have  created  large  cities.  As  railways  bring  about  the  estab- 
lishment of  important  cities  along  their  routes,  so  a  transportation 
route  creates  trade. 

In  order  to  bind  more  closely  the  commercial  relations  between 
the  countries  of  America,  in  order  to  do  something  really  practical 
for  the  purpose  of  increasing  the  commerce  of  this  hemisphere  it  is 
necessary  that  the  first  measure  adopted  for  such  purpose  be  the 
fostering  of  navigation,  for  navigation  is  the  basic  factor  in  the 
economic,  rapid,  and  easy  interchange  of  products. 

Among  the  various  forms  that  there  are,  to  give  encouragement  to 
merchant  marine,  is  that  of  guaranteeing  a  minimum  interest  to  the 
capital  that  may  be  invested  in  such  enterprise  or  to  give  annual 
bounties  or  subsidies  to  the  companies  establishing  navigation  lines, 
for  a  period  of  time  more  or  less  extensive.  If  we  have  adopted  a 


URUGUAYAN  SUPPLEMENT.  683 

system  not  as  favorable,  of  merely  reducing  or  saving  the  expenses  of 
lighthouse  and  port  dues  and  of  consular  invoices,  it  is  because  there 
is  also  a  danger  in  bounties  and  guarantee  of  interest.  This  danger 
consists  in  the  fact  that  the  company  guaranteed  against  the  losses 
sustained  by  lack  of  freight  does  not  make  any  effort  to  work  as  it 
should,  since  it  is  sure  to  make  the  same  gains  without  any  sacrifice. 
A  simple  assistance  which  may  merely  consist  in  the  reduction  of  ex- 
penses places  such  a  company  in  a  position  to  make  every  effort  to 
obtain  profits,  to  get  freight,  and  to  carry  cargo,  which  is  the  real 
and  fundamental  object. 

WEIGHTS  AND   MEASURES. 

Weights  and  measures  in  the  American  countries  should  be  uni- 
form. The  metrical  system  should  be  adopted  and  until  this  has 
been  done  prices,  invoices,  and  bills  of  lading  should  be  compiled  in 
metrical  units. 

In  principle  everybody  has  adopted  as  the  most  logical  the  metri- 
cal system  for  weights  and  measures;  but  habits  and  custom  are 
responsible  for  the  persistence  of  old  measures  in  some  countries. 
In  Great  Britain  traders  have  been  for  some  time  past  mentioning 
in  meters  the  equivalent  of  yards  contained  on  each  piece  of  goods. 
The  Germans  reduce  all  their  operations  to  the  metrical  system  in 
those  countries  where  this  is  used. 

In  the  United  States  trade  is  still  carried  on  by  old  methods.  The 
pound,  the  gallon,  the  foot,  as  well  are  used.  One  gallon  of  wine 
and  one  gallon  of  oil  are  two  different  measures.  In  order  to  pre- 
vent confusion  and  mistakes  that  sometimes,  occur,  the  vendor  should 
always  give  the  prices  in  kilos,  liters,  or  meters,  even  if  the  packing 
does  not  answer  to  those  unities. 

This  proposition  is  in  harmony  with  that  of  establishing  monetary 
unity  throughout  the  American  hemisphere. 

Hobatsck,  the  eminent  economist,  says  that  the  internationaliza- 
tion of  the  metrical  system  is  seriously  opposed  in  Great  Britain 
and  the  United  States;  but  the  English  admit  that  this  opposition 
harms  their  exports  and  favors  that  of  other  countries.  This  is  the 
reason  why  the  equivalents  in  foreign  measures  and  weights  is  men- 
tioned in  British  export  documents.  As  in  all  matters  which  affect 
large  interests,  it  is  difficult  to  change  radically  and  suddenly 
methods  which  have  been  for  a  long  time  in  practice.  It  is  there- 
fore suggested  that  a  transitory  form  be  adopted  which  shall  be  the 
beginning  of  an  evolution.  Trade  will  continue  its  transactions 
with  old  measures  if  circumstances  do  not  permit  of  the  change ;  but 
there  is  no  reason  for  not  mentioning  always  the  equivalents  in 
metrical  units  in  prices  and  bills  of  lading. 


684  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

COMMUNICATION   BY   CABLE. 

The  Conference  declares  that  the  rates  for  cable  messages  between 
the  American  countries  should  be  decreased. 

This  proposition  is  connected  with  that  relative  to  the  postage 
rates  and  has  in  view  the  same  purpose. 

The  rates  for  cablegrams  are  high,  chiefly  between  North  and 
South  America.  This  service  should  be  cheapened  because  the  use 
of  the  cables  for  commerce  is  essential  in  order  to  make  inquiries 
relative  to  general  transactions,  prices,  orders  of  shipment,  etc. 

Cable  rates  between  New  York  and  Montevideo  are  more  expen- 
sive than  those  between  Montevideo  and  London  or  Paris. 

When  the  rates  for  cable  messages  exceeds  certain  limits  they  be- 
come prohibitive,  and  then  the  cables  are  used  only  in  case  of  great 
necessity,  but  not  in  ordinary  transactions. 

It  is  true  that  by  means  of  codes  and  ciphers  merchants  are  able  to 
reduce  somewhat  this  handicap,  and  the  cable  companies  rely  on  this 
fact  in  order  to  have  the  interested  parties  lessen  a  great  deal  of  work 
for  them  by  the  use  of  synthetical  and  conventional  forms.  Not- 
withstanding this,  high  cable  rates  have  a  restrictive  influence  on 
free  use,  and,  furthermore,  not  every  merchant  is  familiar  with  the 
use  of  codes  and  ciphers.  An  inquiry  relative  to  prices  and  specifica- 
tions to  half  a  dozen  firms  represents  sometimes  a  heavy  expense, 
which  not  infrequently  the  smallness  of  the  transaction  itself  pre- 
vents. This  is  particularly  true  of  small  orders,  which  in  the  aggre- 
gate constitute  the  bulk  of  commercial  intercourse. 

The  goal  that  trade  wishes  to  attain  is  to  gain  time,  for  time  is 
money.  So  that  if  there-  are  two  ways  of  communicating  from  one 
portion  of  America  to  another  and  if  the  former  does  it  in  twenty- 
four  hours  and  the  latter  in  twenty-four  days  (New  York  to  Eio  de 
la  Plata),  trade  will  always  make  use  of  the  first;  that  is  to  say,  the 
cable. 

MONETARY  UNIT ;  EXCHANGE  AND  ARBITRATION. 

Resolved,  That  the  Conference  in  regard  to  exchange  and  the  arbitration 
among  American  countries  of  everything  relating  to  prices  of  merchandise,  and 
for  statistical  calculations,  advises  the  adoption  as  a  monetary  unit  of  a 
special  coinage  equivalent  to  some  exact  proportionate  value  of  the  monetary 
unit  of  each  and  every  American  country. 

The  projects  brought  about  in  various  times  and  in  different  coun- 
tries for  the  establishment  of  an  international  coinage  have  encoun- 
tered the  difficulties  of  reconciling  the  interests  of  all  the  nations  of 
the  world.  Only  partial  results  have  been  obtained,  for  instance  that 
of  the  Latin  Union,  that  of  the  Scandinavian  countries,  and  that  of 
the  Germanic  States  in  1838. 


URUGUAYAN  SUPPLEMENT.  685 

In  1902  a  North  American,  Charles  H.  Swan,  gave  a  lecture  be- 
fore the  Statistical  Society  of  Manchester  on  "An  international  gold 
coinage."  He  proposed  to  coin  gold  money  of  10  grams  with  a  fineness 
of  0.915  per  thousand,  and  which  would  be  worth  25  shillings,  or  30 
francs,  or  30  crowns,  or  6  dollars,  or  12  rubles.  As  can  be  seen,  the 
first  thought  of  Swan  was  that  of  conciliating  the  new  money  with 
the  existent  types  in  several  countries;  and  here  his  first  obstacle  was 
also  the  impossibility  of  a  general  solution  on  this  basis. 

But  it  has  been  proven  that  for  a  determined  region  the  adoption 
of  international  money  is  practical. 

That  international  money  is  necessary  for  America  is  shown  by 
the  fact  that  usually  in  operations  of  exchange  the  English  unit  is 
used.  The  exchanges  of  Uruguay  with  Brazil  are  regulated  by  pence. 
As  a  rule  for  the  other  American  countries  money  of  Brazil  is  con- 
sidered by  so  many  pence,  determined  daily  in  the  exchange  quota- 
tions against  London  for  each  1,000  reis.  In  Chile,  on  account  of 
there  having  been  established  an  equivalency  between  the  gold  dollar 
and  the  English  monetary  unit  ($1=18  pence),  it  happens  that 
Chilean  exchange  suffers  by  repercussion  the  effects  of  an  unfavor- 
able exchange  toward  England  in  the  United  States.  As  a  matter 
of  fact,  it  has  been  seen  that  when  pounds  are  on  the  decline  in 
North  American  markets  the  Chilean  dollars  are  at  a  low  ebb,  the 
reason  being  that  their  official  value  is  18  pence.  Peru,  by  observing 
that  its  exchange,  as  in  other  near-by  countries,  always  tended  to 
be  regulated  by  English  money,  has  established  the  Peruvian  pound, 
worth  the  exact  equivalent  of  the  English  pound,  and  rectified  the 
value  of  the  "  soles  "  in  order  that  a  pound  should  have  10 :  therefore 
one  "  sol "  is  worth  2  shillings. 

To  this  complication  resulting  from  the  diversity  of  money  is 
added  the  paper-currency  question,  a  thing  of  oscillating  value, 
which  sometimes  contributes  to  give  an  arbitrary  value  to  foreign 
money.  Recently  we  have  seen  in  the  Province  of  Mendoza,  Argen- 
tine Republic,  that  in  English  commercial  enterprises  pounds  ster- 
ling were  only  received  at  a  value  of  $11  in  paper  currency,  notwith- 
standing that  their  true  equivalent  was  $11.45 ;  and  even  the  simple 
treasury  certificates  of  the  Province— that  circulate  like  money — 
were  worth  on  an  average  $11  paper  currency  for  each  pound  ster- 
ling. 

It  is  in  truth  a  problem  to  regulate  exchange  between  American 
countries  somewhat  distant  and  with  little  commercial  intercourse, 
as,  for  instance,  between  Chile  and  Colombia,  between  Argentina 
and  Venezuela,  between  Uruguay  and  Peru  or  Ecuador.  It  is  gen- 
erally necessary  to  make  the  transaction  through  London  or  Paris. 
The  first  difficulty  is  the  money  for  these  operations,  the  national 


686  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

currency  of  each  American  country.  Owing  to  the  great  commerce 
with  Europe  all  American  nations  are  familiar  with  pence  or  francs, 
and  one  or  the  other  of  these  units  tends  to  be  the  international 
American  money. 

The  International  Conference  on  Commercial  Statistics,  which 
took  place  in  Brussels  during  the  month  of  November,  1913,  re- 
solved to  establish  a  uniform  classification,  to  be  adopted  by  all  the 
signatory  nations  without  forbidding  that  each  could  continue  to 
maintain  for  its  internal  use  the  form  of  statistics  it  would  deem 
most  convenient.  The  uniform  classification  is  used  with  the  object 
of  enabling  one  to  secure  and  understand  clearly  the  tables  of  foreign 
commerce  of  each  and  every  country. 

As  a  consequence  of  the  convention  signed  there,  it  has  been  planned 
to  fix  values  in  francs,  and  weights  and  measures  in  the  metric  sys- 
tem ;  but  no  official  statement  has  been  made. 

Why  should  not  an  American  coin  be  adopted  in  America  to 
supply  all  international  requirements? 

From  the  start  we  may  say  that  the  values  of  commercial  units, 
made  according  to  the  classification  of  the  Brussels  congress,  would 
be  fixed  in  that  international  American  money;  the  exchanges  of 
the  countries  of  America  would  refer  to  that  money  in  dollars;  the 
prices  given  or  asked  for  merchandise  would  be  calculated  in  that 
same  money  and  in  metrical  weights  and  measures. 

In  all  the  American  exchanges  quotations  would  daily  be  made 
in  the  same  money  or  with  reference  to  it. 

By  what  has  been  said  it  will  be  seen  that  we  do  not  propose  a 
formula  which,  on  account  of  its  being  considered  Utopian,  has  been 
rejected  or  postponed  more  than  once — the  giving  up  of  our  respec- 
tive internal  systems  of  money  to  be  substituted  by  a  new  money,  to 
be  the  same  in  all  countries.  This  would  be  absurd,  because  each 
State  has  serious  and  complicated  economic  and  financial  problems 
which  are  closely  bound  to  its  monetary  system. 

We  accept  these  arguments  as  they  stand  and  we  know  they  can 
not  be  substituted  by  theories  or  doctrinaire  arguments.  We  merely 
wish  that  such  money  should  have  the  privilege  of  being  utilized  in 
the  international  transactions  of  the  American  countries. 

The  opposition  to  the  "universal  money"  theory  is  based  on  in- 
numerable arguments ;  nevertheless  the  economic  benefits  that  this  in- 
ternational American  money  would  bring  are  great  and  positive. 
Especially  is  this  the  case  on  the  opening  of  a  new  era  of  commercial 
relations  in  this  hemisphere,  as  hoped  for  by  the  eminent  statesmen, 
originators  of  the  First  Conference  of  American  Financiers,  and  also 
according  to  the  optimistic  expectations  of  all  the  countries  of  the 
New  World. 


URUGUAYAN  SUPPLEMENT.  687 

Money  may  be  considered  the  language  of  business.  Since  an  inter- 
national language  can  not  be  established,  because  it  is  the  more  diffi- 
cult task,  at  least  we  could  try  to  establish  a  money  unit  which  would 
be  common  to  the  American  countries. 

We  may  add  in  favor  of  this  proposition  that  the  excessive  prestige 
of  certain  European  money  often  casts  a  shadow  on  the  merit  of 
American  gold.  Notwithstanding  the  fact  that  the  intrinsic  value  of 
gold  money  is  superior  to  its  face  value,  there  is  an  evident  influence 
of  the  economic  law  of  competition  in  the  general  preference  that 
the  South  American  banks  have  for  pounds  sterling,  and  in  the 
second  place  for  francs,  and  their  little  interest  in  the  gold  coins  of 
Brazil,  Argentina,  Chile,  etc.  Although  it  might  be  considered  as  a 
psychological  effect  of  suggestion,  it  is  a  proven  fact;  and  world 
prestige  in  the  operations  of  international  exchange  can  be  considered 
as  a  phenomenon  logically  derived  from  the  use  of  that  money.  For 
neutralizing  this  the  money  adopted  as  American  international  cur- 
rency will  bring  back  prestige  to  the  gold  coinage  of  the  American 
countries. 

The  manner  of  carrying  it  out  wrould  be  intrusted  to  the  Pan 
American  Union,  and  taking  into  consideration  what  has  already 
been  decided  on  the  subject  by  the  international  Pan  American  con- 
ferences the  governing  board  of  the  American  Republics  might  be 
urgently  asked  to  take  whatever  measures  that  it  may  deem  to  be  the 
most  rapid  and  efficacious  for  the  immediate  adoption  of  the  mone- 
tary unit  of  coinage. 

FINANCES. 

Resolved,  That  the  Conference  declares  that  the  countries  of  the  American 
Republics  should  facilitate  the  action  of  their  representative  banks  in  the  dis- 
count of  bills,  the  movement  of  capital,  the  fostering  of  trade,  the  financial 
support  of  public  works,  and  the  development  of  the  wealth  of  the  American 
continent. 

In  former  congresses  the  idea  of  the  creation  of  a  large  Pan 
American  bank,  the  capital  of  which  should  be  supplied  by  all  coun- 
tries of  America,  was  discussed.  Perhaps  this  artificial  and  isolated 
creation  would  have  no  reason  to  exist,  or  at  least  would  not  be  a 
practical  thing  just  now.  More  logical  and  easier  would  be  the 
organization  of  international  banking  based  on  direct  contact  or  by 
means  of  agencies  or  branches  of  the  large  institutions  of  credit  hav- 
ing the  privilege  of  issuing  bills,  which  institutions  already  exist  or 
should  be  established  as  soon  as  possible  with  the  view  to  regulating 
credit,  discounting  commercial  paper,  and  helping  the  circulation  of 
domestic  currency  and  foreign  exchange. 

The  Bank  of  France,  the  Bank  of  England,  the  German  Imperial 
Bank,  all  these  are  examples  of  such  privileged  institutions.  They 


688  PAN   AMERICAN   FINANCIAL   CONFEEENCE. 

regulate  credit  in  times  of  peace  and  protect  monetary  integrity  and 
national  resources  in  the  difficulties  of  commercial  crises  or  war. 

These  banks  that  have  existed  for  centuries  (with  exception  of 
the  German  Imperial  Bank,  a  relatively  recent  creation,  although  it 
originated  in  the  Bank  of  Prussia,  which  was  founded  in  1785) 
really  represent  the  nations  whose  names  they  bear,  not  only  by 
their  central  power  of  credit  and  the  concentration  of  operations 
they  carry  on,  but  also  by  their  extension  throughout  the  whole  coun- 
try, so  that  they  absolutely  dominate  the  banking  movement  and  give 
it  power  and  direction. 

Up  to  the  23d  of  December,  1913,  when  the  Federal  Keserve  Act 
was  signed — the  great  reform  of  the  Wilson  Administration — the 
United  States  (with  its  thirty  thousand  banks  and  banking  institu- 
tions and  their  $17,000,000,000  in  deposits,  an  enormous  amount  com- 
pared with  the  deposit  of  the  European  banks)  was  not  prepared  to 
make  a  substantial  effort  for  commercial  expansion  abroad,  for  the 
country  lacked  that  unity  of  action  which  is  as  necessary  for  success 
in  the  economic  field  as  it  is  in  military  matters. 

Fortunately  the  Federal  Eeserve  Board  under  the  direction  of  the 
Secretary  of  the  Treasury,  at  present  Mr.  McAdoo,  is  making  effective 
this  aspiration  of  unity  which  extends  throughout  the  whole  country 
by  means  of  its  twelve  Federal  reserve  banks,  which  in  turn  have  their 
ramifications  in  other  banks  established  in  less  important  centers. 

The  discount  and  the  rediscount  of  commercial  paper  (national 
and  foreign)  is  a  means  of  issuing  bills  which  have  a  gold  guaranty 
of  a  determined  percentage.  This  constitutes  the  basis  of  the  new 
system,  which  permits,  with  the  greatest  elasticity,  the  expansion  of 
the  foreign  trade  of  America,  a  project  which  before  the  establish- 
ment of  the  new  regime  was  almost  impossible  of  attainment. 

Uruguay  is  specially  prepared  to  answer  immediately  to  the  new 
banking  organization  of  the  United  States.  Ten  years  ago  there 
was  established  a  large  State  bank,  wherein  politics  has  not  played 
a  role  as  it  was  thought  would  occur  when  established.  This  bank 
has  continued  to  exist,  and  will  continue  to  expand  in  a  surprising 
manner,  entirely  independent  of  politics,  although  it  is  really  a 
State  institution  similar  to  those  of  Sweden  and  Russia,  its  capital 
having  been  contributed  solely  by  the  Government  and  administered 
by  directors  appointed  by  the  Executive  power  with  the  consent  of 
the  Senate. 

There  has  been  built  up  in  Uruguay  a  tradition  which  regulates 
the  administration  of  the  bank,  and  which  no  official,  whatever  his 
prominence  and  power,  could  do  away  with.  This  consists  in  giving 
to  its  directors,  who  are  men  totally  disconnected  with  political  con- 
troversies, the  most  absolute  power  in  the  administration  of  the 
institution.  The  employees  are  selected  among  the  most  able  men, 


URUGUAYAN  SUPPLEMENT.  689 

after  having  passed  certain  examinations,  and  the  principal  officials 
of  the  country,  including  the  First  Magistrate  himself,  take  pride  in 
not  interfering  with  the  independence  of  the  bank,  and  they  do  their 
utmost  to  help  increase  its  resources  and  credit. 

This  bank,  which  to-day  exercises  a  vital  influence  in  the  economy 
of  the  country  by  stimulating  industries  and  trade,  has  twenty-four 
branches  and  agencies  distributed  among  the  principal  cities  and 
towns  of  the  interior,  and  consequently  can  claim  from  an  inter- 
national point  of  view  the  financial  representation  of  the  Republic. 
In  the  near  future  the  bank  will  be  in  a  position  to  extend  its  field 
of  operations  to  North,  Central,  and  South  America,  establishing 
there  also  agencies  and  branches,  for  its  capital  is  rapidly  increasing 
by  means  of  accumulated  profits. 

It  is  obvious  that,  as  the  aims  and  resources  of  the  system  im- 
planted by  the  Federal  Reserve  Board  of  the  United  States  are 
entirely  different,  there  would  be  immediate  and  positive  advantage 
in  the  establishment  of  agencies  and  branches  in  the  other  countries 
of  America  to  give  available  information  to  commerce  and  industry 
and  to  be  efficient  factors  in  trade  interchange. 

European  commerce  has  attained  its  well-known  success  in  Latin 
America  chiefly  through  the  assistance  of  English,  German,  French, 
Italian,  and  Spanish  banks  profusely  disseminated  throughout  those 
countries. 

Thus,  banks  starting  in  business  with  small  capital  have  the  enor- 
mous advantage  of  being  able  to  use  for  their  own  benefit  the  money 
which  is  deposited  in  their  vaults  by  their  countrymen  and  profit 
by  the  rates  of  exchange  which  are  immediately  offered  them  with 
reference  to  the  countries  that  they  represent.  Not  only  do  these 
banks  do  business  in  the  capitals  of  the  Latin  American  countries, 
paying  good  dividends  to  their  shareholders,  but  they  also  establish 
branches  in  the  Provinces  and  districts  where  they  do  good  business. 

If  the  United  States  wishes,  it  it  seems  that  it  does,  while  exer- 
cising its  rights  and  just  aspirations,  to  compete  with  European 
commerce  in  the  South  American  markets,  it  must  send  as  fore- 
runners banking  institutions  having  the  excellent  internal  organiza- 
tion of  the  Federal  Reserve  system. 

COMMERCIAL  CREDIT. 

Resolved,  That  the  Conference  declares  that  there  is  positive  advantage  in 
expanding  commercial  credit  throughout  the  American  countries,  establishing 
long-term  credits  in  commercial  transactions. 

One  of  the  great  handicaps  for  the  expansion  of  trade  in  both 
Americas  has  been  the  system  of  restricted  credits  under  which  trade 
98257°— 15 44 


690  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

has  been  carried  on.  In  marked  contrast  with  the  liberal  credits 
accorded  by  most  European  firms  the  American  concerns  have  main- 
tained a  very  reserved  attitude  toward  Latin  American  merchants, 
which  these  have  resented,  naturally  construing  it  as  questioning  their 
reputation.  "  Goods  against  cash  "  has  been  their  policy.  This  policy 
may  be  explained  to  a  certain  extent  by  the  lack  of  knowledge  of  con- 
ditions and  customs  of  the  Latin  American  markets  and  by  the  need 
of  banking  houses  in  Latin  America.  With  regard  to  commerce, 
Great  Britain  has  predominated  for  many  years,  her  banks  having 
been  a  paramount  factor  in  the  expansion  of  trade  by  means  of 
liberal  credits  accorded  to  responsible  parties  and  their  financiers 
having  contributed  very  largely  through  the  employment  of  capital 
to  develop  the  national  commerce  of  the  Latin  American  countries. 
Many  industrial  enterprises,  railways,  etc.,  have  been  established  with 
British  capital  in  South  America. 

It  has  been  very  accurately  stated  that  credit  is  the  oxygen  of  com- 
mercial life. 

The  obstacles  to  the  establishment  of  branches  in  South  America  of 
American  banks  have  been  overcome  by  the  new  banking  law.  The 
National  City  Bank  of  New  York  has  already  a  branch  in  Buenos 
Aires  and  another  in  Rio  de  Janeiro.  These  American  banking  en- 
terprises are  now  in  a  position  to  follow  in  the  steps  of  their  Euro- 
pean competitors.  The  London  &  River  Plate  Bank  in  Monte- 
video has  a  capital  of  $1,500,000.  The  branches  in  Salto  and  Pay- 
sandu  (interior  towns  of  Uruguay)  are  doing  a  very  good  business. 
The  capital  of  the  four  English  banks  in  Montevideo  is,  in  the  aggre- 
gate, $2,200,000,  and  their  loans  in  the  country  amount  to  $12,000,000. 
If  American  trade  is  going  to  be  developed,  it  is  essential  that  Ameri- 
can banking  institutions  lend  the  necessary  assistance  not  only  by 
the  establishment  of  credit  but  also  through  their  information  serv- 
ice, which  should  and  could  give  comprehensive  data  with  regard  to 
the  standing  and  responsibility  of  business  firms. 

And  now  the  Delegation  of  Uruguay  wishes  to  state  that  Uru- 
guayan commerce  has  acquired  a  high  reputation  throughout  the 
world,  and  takes  pleasure  in  informing  the  Conference  that  the 
Government  of  Uruguay,  desirous  of  protecting  the  commerce  of 
the  country,  presented  a  bill  to  Congress  providing  for  an  interna- 
tional moratorium.  The  law  passed  the  lower  House,  and  before 
the  Senate  had  an  opportunity  to  sanction  it  the  merchants  of  Uru- 
guay, through  their  most  representative  members,  advised  the  Senate 
not  to  sanction  the  law,  as  everybody  was  prepared  to  stand  by 
their  obligations,  and,  in  fact,  they  did.  Thus  the  business  men  of 
Uruguay  paid  their  obligations  abroad,  notwithstanding  the  fact 
that  they  were  not  able  to  cash  their  credits  in  Europe  by  reason  of 
the  moratoria  decreed  in  most  European  countries.  Uruguayan 


URUGUAYAN  SUPPLEMENT.  691 

commerce  is  justly  proud  of  its  standing,  and  is  at  a  loss  to  under- 
stand the  position  taken  by  the  bankers  and  merchants  of  the  United 
States,  so  much  the  more  so  as  the  European  business  men,  partic- 
ularly the  Germans,  have  left  nothing  undone  to  comply  with  its 
wishes  and  requirements,  and  even  during  the  abnormal  conditions 
created  by  the  European  war  have  done  their  utmost  not  to  depart 
from  this  policy. 

We  strongly  present  the  foregoing  facts,  which  we  know  are  noth- 
ing new  to  interested  parties  in  the  United  States,  because  we  believe 
them  to  be  the  only  practical  ones  by  which  commerce  between  North 
and  South  America  can  be  developed. 

POSTAL  RATES. 

Mail  between  the  American  Republics  should  be  regulated  by  the  provisions 
of  the  South  American  Postal  Convention  held  in  Montevideo  in  1911. 

The  International  Postal  Convention  of  Rome,  which  generally 
regulates  the  maximum  rates  for  international  mail  services,  gives  to 
all  adherent  nations  the  right  of  modifying  the  conditions  of  the 
mail  service,  provided  this  tends  to  its  improvement  by  making  it 
cheaper  or  more  efficient. 

The  Government  of  Uruguay,  in  1911,  initiated  a  postal  congress 
of  the  South  American  countries,  which  was  held  in  Montevideo,  and 
discussed  special  conditions  for  the  South  American  mail  service. 
It  established  the  South  American  Postal  Union  and  regulated  the 
free  land  and  water  transportation  of  the  mails  of  the  entire  continent. 
It  reduced  rates  as  follows: 

The  rates  fixed  by  the  Eome  convention  are  reduced  for  the  inter- 
change of  mail  between  the  contracting  countries,  thus : 

(1)  For  letters,  to  2  cents  for  the  first  20  grams  and  1  cent  for  each 
20  grams  or  fraction  exceeding  the  first  20  grams. 

(2)  For  newspapers  and  magazines,  to  2-J  cents  for  each  100  grams 
or  fraction  thereof. 

(3)  For  samples,  to  2J  cents  for  each  50  grams  or  fraction,  with  a 
minimum  postage  of  5  cents.    The  maximum  weight  of  packages  is 
increased  to  500  grams. 

(4)  The  fixed  duties  on  certificate  acknowledgments  of  receipts, 
and  the  demand  of  information  of  the  registered  "pieces  with  no  right 
to  acknowledgment  of  receipt,  as  well  as  the  rate  of  the  express  mail 
are  reduced  to  20  cents. 

(5).  The  administrations  of  the  contracting  countries  forego  re- 
ceiving any  overcharge  (supplementary  or  extra  charge)  for  mail 
for  the  administrations  of  the  other  contracting  countries. 

Furthermore,  the  free  transmission  of  diplomatic  and  consular 
mail  between  the  respective  Governments  was  accorded,  also  for  the 


692 


PAN  AMERICAN   FINANCIAL  CONFERENCE. 


ordinary  mail  of  scientific  institutions,  and  newspapers  sent  on  an 
exchange  basis,  up  to  two  copies  for  each  address.  Possible  differ- 
ences which  may  arise  as  to  the  correct  interpretation  and  applica- 
tion of  this  agreement  to  be  arbitrated. 

As  the  mail  rates  are  expressed  in  francs  with  regard  to  the  Eome 
convention,  the  following  equivalents  have  been  adopted : 


Countries. 

20  cen- 
times. 

10  cen- 
times. 

1\  cen- 
times. 

Argentina  .  . 

cents.. 

10 

5 

H 

Bolivia 

do.... 

8 

4 

1 

Brazil 

reis 

160 

80 

20 

Colombia 

cents  (gold).. 

4 

2 

| 

Chile 

cents.  . 

12 

6 

2 

do 

4 

2 

1 

Paraguay 

...do... 

40 

20 

5* 

Peru 

do.. 

8 

4 

1 

Urucuav 

do.... 

4 

2 

| 

The  fact  that  the  Montevideo  convention  should  have  only  affected 
South  American  countries  shows  the  weak  bonds  which  have  existed 
until  now  among  the  countries  of  both  Americas.  But  from  the 
moment  that  common  interests  of  real  effectiveness  look  forward  in 
good  faith  to  a  closer  approximation  nothing  is  more  fair  and 
logical  than  the  adoption  for  the  whole  American  Hemisphere  of 
the  conclusions  arrived  at  for  the  South  American  countries.  Cheap 
and  easy  mail  interchange,  applying  also  to  cable  messages,  is  one 
of  the  prime  elements  for  the  fostering  of  closer  commercial  rela- 
tions. On  the  other  hand,  the  reduction  of  postal  rates  contem- 
plated by  the  United  States  would  have  its  full  success  if  the  coun- 
tries of  Central  and  North  America  would  adhere,  as  is  to  be  hoped, 
to  the  Montevideo  convention. 

CUSTOMS  CONCESSIONS. 

Resolved,  That  the  Conference  declares  that  there  is  positive  advantage  for 
the  American  Republics  in  establishing  common  customs  house  concessions  or 
in  providing  other  means  which  will  secure  the  marketing  of  the  excess  of  their 
industrial  products. 

The  difficulties  which  some  countries  of  Latin  America  have 
already  experienced  in  marketing  the  excess  of  their  industrial  prod- 
ucts are  more  apparent  in  the  countries  of  small  population. 

It  is  a  well-known  fact  that  the  only  industrial  system  meeting 
with  modern  requirements  is  that  which  obliges  the  cost  of  produc- 
tion to  descend  to  minimum  amounts,  which  occurs  with  the  develop- 
ment of  great  industries  (it  being  impossible  to  conceive  the  lonely 
existence  of  the  small  shop  beside  the  large  factory).  Big  factories, 
by  multiplying  the  products,  reduce  to  insignificant  quantities  the 


URUGUAYAN  SUPPLEMENT.  693 

expenses  of  production.  In  order  to  be  successful  in  the  present 
time  it  is  necessary  that  the  factory  should  have  all  modern  improve- 
ments and  not  stop  the  machinery  from  working  for  even  a  moment, 
because  stopping  it  would  signify  the  loss  of  motor  power,  a  margin 
of  sufficient  expense  to  bring  about  defeat,  owing  to  great  compe- 
tition. 

The  large  factory  generally  has  sufficient  capacity  to  fill  an  entire 
market,  to  satisfy  the  necessities  of  a  South  or  General  American 
country  having  a  small  population,  to  bring  about  immediately 
superabundance;  and  when  the  manufacturer  desparingly  seeks  the 
foreign  consumer  in  the  neighboring  countries  he  encounters  the 
barrier  of  customs  house  duties  which  can  be  overcome  by  the  great 
European  industries  but  can  not  be  conquered  by  the  growing 
national  industries,  for  these  are  halted  in  their  first  steps  and  in 
their  legitimate  desire  to  exist  and  progress.  We  could  mention  as 
an  example  our  country,  Uruguay,  with  its  million  and  a  half  of 
people,  where  only  one  factory  for  hats,  for  alcohol,  for  sugar,  for 
textiles,  or  for  shoes,  would  have  sufficient  capacity  to  fill  all  necessi- 
ties ;  and  when  new  manufacturers  would  try  to  enter  in  competition 
with  those  already  established,  an  harmful  combination  would  have 
to  take  place  or  else  the  meritorious  manufacturers  would  be  ruined, 
because  there  would  be  no  way  of  enlarging  consumption  to  find  an 
opening  abroad.  This  would  be  prohibited  by  the  double  obstacle, 
of  European  industry  having  dominated  in  former  years,  and  of  cus- 
toms house  duties  of  the  bordering  countries  which  do  not  dif- 
ferentiate between  the  newly  established  industries  and  those  which 
for  a  long  time  have  won  a  market  by  suiting  the  requirements  of  the 
consumers. 

And  let  it  not  be  said  that  the  countries  of  Latin  America  which 
accomplish  the  feat  of  annually  exporting  to  an  amount  of  more 
than  one  thousand  five  hundred  million  dollars  do  not  deserve  to  be 
listened  to,  in  their  just  claims  of  having  rigjits  in  the  markets  that 
they  themselves  have  created.  No  one  should  think  that  the  equaliz- 
ing of  rights  in  America  itself  represents  merely  the  placing  in 
similar  conditions  of  the  American  and  the  European  manufacturer. 

We  do  not  pretend  in  any  way  to  ask  special  favors  which  possibly 
would  inconvenience  us  and  would  cause  antagonism  in  both  conti- 
nents. We  do  wish,  however,  to  be  on  the  same  footing,  to  calculate 
as  accurately  as  possible  the  advantages  that  the  European  manu- 
facturer has  in  producing  articles  on  account  of  the  small  interest 
he  pays  for  capital  owing  to  his  greater  technical  preparation,  to 
the  reduced  salaries  of  his  workingmen,  and  to  the  fact  that  he  has 
ruled  the  market  for  nearly  a  whole  century.  And,  after  making 
this  calculation,  to  overcome  the  differences  (that  no  one  can  deny 


694  PAN   AMERICAN   FINANCIAL   CONFERENCE. 

exist),  to  such  an  extent  that  the  American  countries  can  compete 
with  the  European  nations  within  their  own  territories. 

On  examining  the  statistics  of  four  of  the  principal  countries  of 
South  America:  Brazil,  Argentina,  Chile,  and  Uruguay,  we  find 
that  more  than  3  per  cent  of  the  foreign  commerce  of  Brazil  and 
Chile,  notwithstanding  all  these  difficulties,  is  with  the  American 
continent;  that  Uruguay  uses  more  than  20  per  cent  of  importa- 
tions of  American  origin;  and  that  while  Argentina  as  yet  has  not 
reached  that  amount,  it  tends  to  approximate  it  by  its  prodigious 
growth.  Argentina,  perhaps  more  than  any  other  country,  would  be 
interested  in  special  favors  for  its  industries  because  it  has  forty 
thousand  factories  and  shops  that  give  work  to  one  million  three 
hundred  thousand  laborers;  and  if  we  examine  its  trade  with  the 
neighboring  countries,  we  are  filled  with  wonder  at  the  little  im- 
portance this  industrial  trade  has .  compared  with  the  great  inter- 
change which  the  country  makes  in  the  products  of  its  prodigious 
agriculture. 

Two  of  the  Uruguayan  delegates  have  just  traveled  throughout 
the  Republic  of  Chile  in  coming  to  Washington,  and  they  can  there- 
fore state  that  Chile  is  a  country  with  the  greatest  manufacturing 
possibilities  in  the  world,  on  account  of  its  many  large  waterfalls, 
which  in  the  near  future  will  become  motive  power  owing  to  the 
proximity  of  the  territory  to  the  seaports  and  to  its  enormous  coast. 
This  clearly  shows  the  future  that  nature  has  in  store  for  that  Re- 
public, being,  as  it  is,  a  maritime  country  devoted  to  the  transporta- 
tion of  its  incalculable  mineral  wealth  and  to  the  products  of  its 
manufacturing  establishments  which  could  not  exist  except  for  the 
white  coal  which  is  found  in  abundance. 

To  the  Republic  of  Brazil  the  proposed  resolution  would  be  of 
great  assistance,  because  Brazil  also  represents  in  South  America 
natural  advantages  for  the  industries  of  North  America  on  account 
of  its  vast  territory,  it£  large  population,  its  unexplored  wealth,  its 
waterfalls,  and,  lastly,  because  its  frontier  touches  nearly  all  the 
South  American  countries. 

Of  the  other  South  American  nations  we  possess  no  accurate  data, 
but  it  is  logical  to  suppose  that  their  economic  situation  is  more  or 
less  similar  to  that  of  the  four  countries  which  we  have  studied,  and 
to  all  of  whom  the  favors  and  reciprocal  facilities  that  we  propose 
would  prove  most  advantageous. 

And,  with  regard  to  the  United  States,  mutual  concessions  rela- 
tive to  customs-house  duties  would  put  that  country  in  a  position  to 
compete  on  a  fair  basis  with  the  European  manufacturers  and  pos- 
sibly to  counterbalance  the  high  cost  of  production  of  the  United 
States  with  the  low  cost  of  manufacturing  in  Europe. 


URUGUAYAN   SUPPLEMENT.  695 

COMMERCIAL  EDUCATION. 

Resolved:  That  the  Conference  strongly  advocates  the  interchange  of  students 
and  the  establishment  of  a  mercantile  museum  or  permanent  exposition  of  Pan 
American  products  of  the  countries  of  the  American  hemisphere. 

During  the  last  few  years  the  countries  of  America  have  devoted 
considerable  attention  to  the  fostering  of  commercial  studies.  The 
European  countries  have  shown  the  way  of  this  technical  knowledge, 
and  the  Germans  owe  the  great  successes  of  their  commercial  expan- 
sion to  the  thousands  of  students  who  have  graduated  from  their  ele- 
mentary and  high  schools  of  commerce. 

The  High  School  of  Commerce  of  Uruguay,  a  Government  institu- 
tion, was  inaugurated  in  Montevideo  ten  years  ago.  Originally  this 
school  was  a  branch  of  the  University  of  Montevideo,  qualified  as  to 
faculty  on  the  same  lines  as  the  faculties  of  law,  medicine,  and  engi- 
neering. Later  it  was  thought  advisable  to  give  this  institution  a 
self-governing  administration  under  the  guidance  of  prominent  mer- 
chants and  manufacturers  of  the  country.  The  success  of  the  High 
School  of  Commerce  of  Montevideo  is  most  gratifying,  and  the 
students  graduated  from  this  institution  and  already  engaged  in 
active  business  in  banks,  factories,  and  commercial  offices  have  greatly 
improved  the  efficiency  of  the  same.  This  success  has  encouraged  the 
administration  of  the  high  school  to  more  ambitious  plans. 

Commerce  has  no  boundaries,  its  ambition  is  to  expand  throughout 
the  world.  And  this  expansion  should  first  take  place  in  the  Ameri- 
can Hemisphere.  Among  the  many  factors  which  contribute  to  the 
success  of  modern  business,  traveling  is  one  of  the  foremost.  The 
student  that  graduates  from  commercial  institutions  should  not  con- 
sider his  studies  concluded  until  he  has  traveled  through  the  coun- 
tries which  are  to  be  in  the  future  the  field  of  his  activities,  getting 
in  touch  with  men  and  conditions.  It  is  in  the  early  stage  of  life 
when  the  mind  is  more  easily  impressed  and  familiarized  with  new 
and  strange  conditions  and  when  the  men  of  different  countries  are 
more  solidly  united. 

This  same  thought  with  regard  to  international  relations  has  al- 
ready done  much  for  intellectual  interchange  between  the  universi- 
ties of  the  American  Hemisphere,  but  so  far  it  has  been  limited  to 
medicine,  law,  and  engineering.  There  is  no  reason  why  it  should  not 
extend  to  commercial  activities.  In  fact  these  ought  to  predominate 
as  their  mission  will  be  to  attain  the  highest  figures  possible  in  the 
exchange  of  wealth. 

The  High  School  of  Commerce  of  Uruguay  teaches  with  the  utmost 
efficiency  bookkeeping,  accounts,  geography,  political  economy, 
languages,  particularly  English,  stenography,  etc.  The  courses  last 
three  years  and  it  is  contemplated  to  increase  this  to  four  years.  The 
nature  of  the  studies  is  both  theoretical  and  practical.  Not  to  men- 


696  PAN  AMERICAN  FINANCIAL  CONFERENCE. 

tion  the  practical  knowledge  acquired  at  the  school  itself  where  the 
actual  business  life  is  carried  on  almost  to  perfection,  the  students 
enter  for  some  time  as  clerks  in  commercial  and  industrial  firms 
where  they  are  in  personal  touch  with  the  heads  of  the  several  depart- 
ments who  give  them  most  salutary  advice. 

Most  of  the  commercial  institutions  of  Central  and  South  America 
have  adopted  a  similar  organization,  and  there  is  every  reason  to  be- 
lieve that  the  student  graduated  from  those  schools  will  be  the  best 
commercial  agent  of  those  countries  and  a  most  important  factor  in 
the  Pan  American  commercial  interchange.  The  Commercial  High 
School  of  Montevideo  is  actively  engaged  in  perfecting  its  Mer- 
cantile Museum,  which  is  rapidly  reaching  completion.  The  scope 
of  this  museum  is  to  facilitate  the  study  and  knowledge  of  foreign 
goods.  Samples  of  foreign  and  national  products  are  exhibited  free 
of  charge  and  after  some  time  the  manufacturers  are  at  liberty  to  take 
back  their  samples.  Merchants  are  invited  to  visit  the  museum  where 
they  may  compare  prices  and  conditions  and  thus  two  important  re- 
sults are  obtained:  First,  commercial  education,  and,  secondly,  the 
fostering  of  interchange. 

The  conference  should  indorse  the  establishment  of  business  high 
schools  throughout  the  American  Hemisphere  equipped  with  mer- 
cantile museums  which  should  exhibit  American  goods  in  preference 
to  any  others. 

With  regard  to  the  relation  of  public  credit  to  a  well  organized 
system  of  taxation  and  a  balanced  budget  it  should  be  agreed  that 
the  Conference  considers  it  would  be  advantageous  as  the  basis  for 
a  good  taxing  system  to  decrease  the  duties  in  the  American  Re- 
publics on  the  primary  materials  and  articles  necessary  to  life,  as, 
for  example,  food  and  clothing,  etc.,  substituting  for  them,  as  far 
as  possible,  the  increase  of  duties  on  superfluous  articles  of  luxury 
directly  applied  or  in  the  form  of  a  State  monopoly,  which  will, 
prevent  fraud  in  collecting  those  taxes.  It  would  also  be  advisable 
to  legislate  with  regard  to  graduated  taxes  on  inheritances  in  order 
to  prevent  the  transmission  of  capital  from  one  country  to  another 
for  the  purpose  of  avoiding  the  collection  of  such  taxes. 

The  countries  of  America  have  abused  indirect  taxation,  prin- 
cipally of  the  duties  of  importation,  which  in  new  countries  in  an 
almost  exclusive  manner  affect  the  consumption  of  articles  necessary 
to  life.  As  countries  just  beginning  to  exist,  without  time  for  the 
accumulation  of  wealth  and  for  the  possession  of  private  fortunes, 
the  American  nations  have  had  to  go  to  the  poorer  classes  for 
pecuniary  aid,  because  the  food  and  clothing  articles  are  the  only 
ones  consumed  in  sufficient  quantity  to  offer  satisfactory  incomes, 
the  only  exception  being  the  articles  of  luxury  of  unnecessary  con- 
sumption entering  through  their  customhouses. 


URUGUAYAN  SUPPLEMENT.  697 

On  considering  this  distribution  of  wealth  and  the  amount  of  the 
duties  that  take  away  from  the  poorer  classes  part  of  their  food 
and  clothing  in  order  to  contribute  to  public  expenses,  it  is  only 
just  to  try  to  discover  new  sources  of  income,  in  order  to  avoid  those 
irritating  evils,  and  to  assure  to  the  States  the  means  of  carrying  on 
their  work. 

We  are  very  far  from  the  conception  of  a  State  constituting  itself 
judge  of  this  matter,  because  of  the  every-day  requirements  of 
public  service  which  make  it  an  obligation  of  the  Government  to  pro- 
tect the  poor  and  take  care  of  the  sick  that  have  no  way  of  caring 
for  themselves,  and  which  cause  increased  expenses  in  the  school 
system  and  in  sanitary  and  public  works  in  an  endeavor  on  the  part 
of  the  State  to  keep  itself  abreast  with  other  civilized  nations. 

Not  only  have  the  European  nations  doubled  their  appropriations 
for  the  reasons  that  we  have  just  mentioned,  but  nearly  all  the 
American  States  have  done  likewise.  And  it  has  been  the  indirect 
duty  (namely,  that  on  importations  collected  in  the  customhouses  of 
maritime  or  land  frontiers)  which  has  sustained  this  enormous 
increase  of  the  expenses  of  the  State. 

In  American  countries  incomes  are  taxed  under  the  general  name 
of  trade  assessments,  and  thus  industry,  commerce,  and  the  liberal 
professions  are  made  to  yield  to  the  State  part  of  their  profits;  but 
it  is  clear  that  the  principal  income  coming  through  accumulated 
fortunes  earned  by  labor  and  through  inheritances  from  century  to 
century  do  not  offer  the  State  treasuries  of  American  nations  sums 
equal  to  those  that  may  be  obtained  in  Europe. 

It  is  necessary,  therefore,  to  think  of  other  kinds  of  taxes  that 
may  overcome  these  disadvantages.  Two  classes  of  measures  should 
be  considered  by  the  American  States  as  being  of  great  importance. 

The  first  is  that  for  high  imposts,  etc.,  on  articles  that  are  not  the 
most  pressing  necessities,  to  be  obtained  by  means  of  ordinary  duties 
or  by  State  monopolies,  and  the  second  that  of  inheritance  taxes 
arranged  in  double  progression,  based  on  the  amount  of  the  capital 
and  the  degree  of  relationship. 

The  monopolies  of  the  manufacture  and  sale  of  articles  in  favor 
of  the  State  should  only  apply  to  those  which  are  not  prime  neces- 
sities of  life. 

By  monopolizing  the  sale  of  such  products  the  prices  can  soar 
enormously  with  great  advantage  for  the  National  Treasury  in  the 
same  way  that  by  properly  handling  their  manufacture  they  can 
make  great  economies  and  thus  also  increase  the  profits.  For  ex- 
ample, as  far  as  the  monopoly  of  alcohol  is  concerned,  the  State  may 
amend  the  law  by  prohibiting  the  sale  of  noxious  products  of  private 
manufacture,  which  lead  men  to  degeneracy  and  insanity. 


698  PAN  AMERICAN   FINANCIAL  CONFERENCE. 

Besides  measures  for  regulating  monopolies  and  gambling,  the 
countries  of  America  should  adopt  the  measure  of  taxing  inheritances 
which  avoids  the  imposition  of  high  duties  on  the  parents  and  chil- 
dren and  husbands  and  brothers,  etc.,  but  which  frankly  declares  to 
be  coheirs  persons  of  more  distant  relationship. 

The  present  family  is  not  the  family  of  old,  that  of  the  small  vil- 
lage, in  which  everybody  was  related,  even  those  of  the  tenth  col- 
lateral degree.  Such  ties  of  blood  are  very  distant  ones  now,  and 
have  been  kept  up  only  through  the  living  together  within  small 
limits.  The  family  of  to-day  is  a  different  one ;  it  is  that  of  a  great 
city,  where  people  are  unacquainted  with  their  neighbors,  even  though 
these  be  their  relatives,  of  the  same  stock ;  it  is  a  family  that  is  sub- 
ject to  the  increasing  necessities  and  to  the  insatiable  desire  for  com- 
fort and  regulated  by  the  fruitful  activities  of  the  present. 

In  these  times  we  live  in  feverish  activity.  The  tendency  of  every- 
one is  to  abandon  their  country  homes  for  the  large  cities,  and,  with 
the  exception  of  the  families  living  permanently  in  the  country  that 
keep  up  old  traditions,  the  circumstances  are  not  such  nowadays  as 
to  permit  the  cultivation  of  widespread  bonds  of  relationship  which 
are  not  in  harmony  with  true  sentiments  of  friendship. 

Society  has  no  positive  interest  in  the  compulsory  acknowledgment 
of  distant  relationship  by  decree  of  the  law,  it  being  sufficient  in 
order  to  secure  the  maintenance  of  a  united,  strong,  and  permanent 
family  to  consider  that  the  only  ones  forming  it  are  the  parents,  the 
children,  the  husbands,  the  wives,  the  brothers,  and  sisters. 

The  modern  legislator  has  no  reason  to  consider  distant  relatives,  so 
that  when  unexpected  connections  from  India  present  themselves  he 
can  and  will  claim  without  scruple  the  participation  of  the  State  in 
the  inheritance  in  order  to  be  able  to  treat  generously  those  who  are 
indigent  and  sick  in  the  hospitals  and  asylums.  There  are  other  cir- 
cumstances that  give  to  us — the  Americans — the  right  to  be  more 
strict  in  matters  of  inheritance  taxes  than  the  European  nations. 
Those  that  are  interested  in  this  matter  in  Europe  have  been  able  to 
show  that  it  is  a  tax  that  must  affect  the  capital  of  those  distantly 
related,  and  thus  in  France,  England,  and  Germany  it  reaches  down 
to  degrees  of  relationships,  relationships  that  represent  24  and  even 
29  per  cent  of  the  cases  of  inheritance. 

The  customary  percentage  in  Europe  is,  as  a  rule,  half  of  the  usual 
interest  in  America,  there  being  levied  7  per  cent  on  an  inheritance  in 
a  European  country.  This  is  double  the  annual  interest,  and  if  in 
an  American  country  an  inheritance  should  be  taxed  on  this  scale  the 
amount  collected  would  scarcely  be  one  year's  interest. 

In  these  latter  years  the  principal  countries  of  Europe  have  in- 
creased the  taxes  on  inheritances,  and  some  of  them  have  entered  into 


URUGUAYAN  SUPPLEMENT.  699 

treaties  whereby  the  obligation  is  imposed  on  their  bankers  to  declare 
the  existence  of  funds  or  property  belonging  to  the  citizens  of  the 
contracting  countries  that  may  die,  so  as  to  avoid  attempts  to  evade 
the  tax. 

Therefore  it  would  be  advisable  that  in  America  the  States  should 
lend  aid  to  one  another,  in  order  to  regulate  the  collection  of  this  tax. 
The  most  efficacious  way  to  stop  fraud  and  prevent  the  transfer  of 
personal  property  from  one  country  to  another,  and  thereby  evade  the 
tax,  would  be  the  adoption  of  a  uniformity  of  rates  of  taxation  by 
neighboring  countries  and  to  make  obligatory  the  declaration  by  all 
bankers  of  the  securities  deposited  in  their  safes  when  the  death  of 
the  owner  of  the  same  shall  take  place. 

(Signed)  PEDRO  Cosio. 

GABRIEL  TERRA. 

CARLOS  MARIA  DE  PENA. 


INDEX. 


Acevedo,  Senor  Dr.  RamCn  F. :  Page. 

Address 104-105 

Delegate  from  Panama 8,25,42,64 

Member  of  Committee  on  Uniformity  of  Laws 31,  70, 143 

Aerts,  G.  A. : 

Member  of  Permanent  Group  Committee 529 

Representative  of  United  States  at  Conference 44,  57 

Agricultural  resources : 

Argentina 274,  557 

Dominican   Republic 137 

Ecuador 150-151 

Nicaragua 584 

Paraguay 597 

Aguilar,  Senor  Dr.  Roberto : 

Delegate  from  Salvador 8,  25,  42,  67 

Aguirre,  Senor  Dr.  Guillermo,  honorary  president  of  Conference 39 

Aldao,  Senor  Dr.  Ricardo  C. : 

Delegate  from  Argentina 8, 12,  24.  30,  41,  52 

Member  of  Committee  on  Transportation 30,  71,  279 

Memorandum  submitted  by 535-550 

Remarks  on  transportation 273-274 

Reply  to  Secretary  McAdoo's  remarks  on  anniversary  of  Argentina-          148 

Report  summarized  by 273-275 

Trade  relations,  consideration  of 134, 148,  255 

Alexander,  James  S.,  member  of  Reception  Committee 25 

Allen,  Frederic  W.,  representative  of  United  States  at  conference 44 

Alva,  Martinez  de.     See  Martinez  de  Alva. 

Alzamora,  Senor  Dr.  Isaac: 

Address 106-107 

Chairman  of  Conference  Committee,  Peru 66 

Delegate  from  Peru ! 8,  25,  30,  42,  66 

Honorary  vice  president  of  Conference 40 

Member  of — 

Committee  on  Transportation 30,71 

Committee  on  Uniformity  of  Laws 31,  70, 143 

Present  situation  in  Peru 277 

Remarks  on  harmonious  work  of  Conference 264-265 

701 


702  INDEX. 

Ancfzar,  Senor  Dr.  Roberto : 

Delegate  from  Colombia 8,  24,  41,  56 

Member  of  Committee  on  Uniformity  of  Laws 31,  70,  142 

Remarks  on  results  of  Conference 257 

Anderson,  Larz,  reception  to  delegates 502 

Annapolis,  Md.,  delegates  visit 493 

Aparicio,  Senor  Dr.  Rafael,  member  of  official  party  on  trip 503 

Arbitration  of  Commercial  Disputes — 
Advocated  in  trade  disputes  by — 

Argentina 274-275 

Cuba 251,383 

Paraguay 276 

Peru 446 

Uruguay 684-687 

Venezuela 466 

Dr.  Aldao  suggests  system  of 317 

Ardrey,  J.  Howard : 

Representative  of  United  States  at  conference 44,  67 

Argentina : 

Agricultural  resources 274 

Ambassador — 

Invited  to  attend  conference  as  special  guest  of  Secretary  of 

the  Treasury 43,52 

Anniversary   congratulations 147 

Arbitration  in  trade  disputes 274-275 

Banks  and  banking 316-318,  555-557 

Conference  committee 52 

Finances — 

Memorandum  of 553-557 

Remarks  of  Dr.  Pearson  on 133-134 

Group  conference  report 315-318 

Group  report  summarized 273-275 

Improved  banking  facilities  necessary 274 

International  trade 541-543 

Loans 554-555 

Merchant  marine,  fast  service 316-317 

Permanent  Group  Committee 528 

Preliminary  draft  of  resolution  on  international  commercial  arbi- 
tration   548-550 

Remarks  relative  to  group  report 255 

Resolution  on  banking  facilities 274 

Stock   raising 274 

Suggestions  for  Pan  American  uniformity  in  commercial  relations.  _          547 

Telegram  from  the  President  of 193-194 

Telegraphic  service 273,  317 

Trading  facilities 315-317 

Transportation.^ 315-316 

Uniformity  of  commercial  law,  etc 535-550 

Arjona,  Senor  Dr.  Aristides: 

Chairman  of  Conference  Committee,  Panama 64 

Delegate  from  Panama 8,  25,  42,  64 

Economic  conditions  in  Panama,  remarks  on 264 

Honorary  president  of  the  Conference 39 

Speaker  at  banquet  on  trip 499 


INDEX.  703 

Arias,  Seilor  Dr.  Ramon,  jr. :  Page. 

Delegate  from  Panama 8,  25,  42,  64 

Armour  &  Co , 498 

Armstrong,  John  S.,  member  of  Permanent  Group  Committee 531 

Armstrong,   Joseph    G.,    remarks 490 

Arnold,  John  J. : 

Address 224-227 

Banking  facilities 226 

Laying  foundations  for  commerce 225 

Remarks *  498 

Representative  of  United  States  at  Conference 44,  66 

Austin,  Richard  L.,  representative  of  United  States  at  Conference 44,  63 

B. 
Babson,  Roger  W.: 

Address 239-240 

Member  of  Permanent  Group  Committee 532 

Representative  of  United  States  at  Conference 44,66 

Suggests  committee  on  shipping  bill 290 

Bacon,  Hon.  Robert: 

Member  of  Permanent  Group  Committee 529 

Baker,  Charles  F.,  group  secretary  for  Ecuador 60 

Ballivian,  Seilor  Dr.  Adolfo,  delegate  from  Bolivia 8,  24,  41,  53 

Baltimore,  Md.,  delegates'  visit  to 494 

Bancroft,  Chas.  G.,  representative  of  United  States  at  Conference 44 

Bankers'  Association  of  the  Pacific  Coast  and  Rocky  Mountain  States, 

telegram    from , 233-234 

Banks  and  banking: 

Argentina 316^318,  555-557 

Better  facilities  urged  by  Bolivian  delegation 255 

Bolivia 250,324-328 

Branch  banks — 

Advocated  by  Dr.  Hector  Velazquez 276-277 

Establishment   of 118,  253,  258-259 

Federal  Reserve  Board's  power  to  establish  in  foreign  countries-          163 

Remarks  of  F.  A.  Vanderlip  on 140-141 

Brazil 254,  335-338 

Changes  brought  about  by  Federal  reserve  act 155-164 

Chile 565-567 

Colombia 364-365 

Costa    Rica 251,  374 

Dominican    Republic 252,  394-395 

Ecuador 405-406,577 

Establishment — 

In  Latin  America 210 

In  Peru 277 

Extension  of  local  facilities  advocated  by  Peruvian  delegation 265 

Facilities,  remarks  on — 

R.  C.  Aldao 273 

J.  J.  Arnold _ 226 

Wm.  C.  Redfield '. 130 

Foreign,  tables  of 566 

Guatemala  _  _  253,416-417,420 


704  INDEX. 


Banks  and  banking — Continued.  Page. 

Honduras 275,  424-425 

Law  of  checks 214 

Moratorium 213 

National   and   State 156 

Nicaragua 583 

Panama 437 

Paraguay 276,  441,  600-601 

Peru 445,  611-613 

Salvador 253,449-450,  624,  631-632 

United  States  laws  regarding 261-262 

Uruguay 253,  456 

Venezuela 659 

See  also  Credit ;  Federal  reserve  banks ;  Loans. 

Banquet  tendered  delegates,  proceedings  at .?__  471-490 

Bard,  Dr.  Harry  Erwin: 

Group  secretary  for  Peru 66 

Member  of  Reception  Committee 25 

Barrett,  Hon.  John: 

Address 29,  78,  200-206 

Appreciation  of  services 32 

Member  of — 

Committee  on  Uniformity  of  Laws 31,  70, 143 

Committee  to  Visit  South  and  Central  America 527 

Representative  of  United  States  at  conference 44 

Tribute  from — 

Secretary  Wm.  G.  McAdoo 490 

Hon.  Dudley  Field  Malone 489 

Dr.  L.  S.  Rowe 487 

Barros  Luco,  Ram6n,  reply  to  President  Wilson's  cable 508 

Barroso,  Senhor  Dr.  Sabino,  honorary  president  of  Conference 59 

Baun,  Claud  de: 
Secretary  to — 

Committee  on  Transportation 71,  309 

Committee  on  Uniformity  of  Laws 70,  303 

Benavides,  Gen.,  reply  to  President  Wilson's  cable 512 

Bertrand,  F.,  reply  to  President  Wilson's  cable 511 

Bertron,  S.  R.,  member  of  Reception  Committee 25 

Beverley,  Mass.,  delegates'  visit  to 502 

Bills  of  exchange: 

Acceptance  of 163 

Discussed  at  The  -Hague  conference 215,  216 

Ecuador  memorandum 578 

Remarks — 

C.   A.   Conant 213-214 

H.  R.  Eldridge 218-219 

See  also  Uniformity  of  Laws. 
Bippus,  W.  F. : 

Member  of  Permanent  Group  Committee 528 

Representative  of  United  States  at  Conference 44,  53 

Bissell,  Hon.  Herbert  P 500 

Bixby,  William  K.,  representative  of  United  States  at  Conference 44,  68 

Black,   David  P.,  member  of  committee  to   visit   Central  and   South 

America  _.  527 


INDEX.  705 

Page. 

Elaine,  James  G.,  work  acclaimed  by  Latin  America 94, 106 

Blankenburg,  Rudolph,  welcomes  delegates 495 

Bolivar,  Simon : 

Letter  to  Lafayette 667-668 

Pan  American  Congresses,  initiator  of 657 

Bolivia : 

Appointment  of  High  Commission  in 16 

Banking  facilities 255 

Central  commercial  agency  advocated 250,  255,  256,  326 

Commercial  laws 323,  324 

Conference  Committee,  chairman  of 53 

Currency 327 

Debts- 
Foreign  323,  331 

Internal 331 

Envoy  Extraordinary  and  Minister  Plenipotentiary  of — 

Invited  to  attend  Conference  as  special  guest  of  Secretary  of 

the  Treasury 43,  53 

Fruits,  tropical 250,  322 

General  remarks  on 330 

Group  Conference  report 321-331 

International  trade 250,  330 

Loans 328 

Merchant  marine 323 

Mineral  resources 250,  321-322,  329 

Monetary  situation 250,  324-325 

Natural  resources 250,  321 

Navigation,  inland 323 

Permanent  Group  Committee 528 

Political  situation 323 

Present  banking  situation 325 

Present  conditions  in 134 

Public  improvements,  financing  of 325-326 

Public  revenues 330 

Railways 250,  322-323,  328-329 

Reduction  of  taxes  urged 255 

Remarks  relative  to  group  report 255-256 

Report  summarized , 250 

Rubber,  important  product  of 250;  322 

Stock  raising 250,  322 

Timber 250,  322 

Trade  and  commerce 250,  321-324 

Trade,  effect  of  war  on 328 

Transportation  facilities 250,  323 

Bonded  warehouses : 

Establishment  of 277 

Receipts  as  collateral  security 251 

Bonds : 

Chile 566 

Ecuador 404 

Bope,  Henry  P.,  remarks 496 

98257°— 15 45 


706  INDEX. 

Boston,  Mass. :  Page. 

Delegates  visit  to 501-502 

Visit  of  Chinese  merchants  commission 501 

Boyd,  L.  G.,  representative  of  United  States  at  Conference 44,  65 

Boyer,  Joseph,  luncheon  to  delegates 499 

Branch,  H.  N.,  group  secretary  for  Guatemala 61 

Branch  banks.    See  Banks  and  banking. 

Brand,  Charles  J.,  representative  of  United  States  at  Conference 44,  57 

Brazil : 

Ambassador — 

Invited  to  attend  Conference  as  special  guest  of  Secretary  of 

the  Treasury 43,  54 

Banking 254,335-337 

Bureaus  of  standards,  establishment  of 254 

Conference  Committee,  chairman  of 54 

Foreign  commerce,  1910-1914 341 

General  suggestions  of  committee 339-344 

Group  conference  report . 333-346 

Imports  and  exports 335-336,  341-346 

Local  commercial  banking 336-338 

Natural  resources,  study  of,  recommended 338 

Parcel  post,  establishment  of : 255 

Permanent  Group  Committee 528 

Population  and  surface 346 

Remarks  relative  to  group  report 256-257 

Report    summarized 254-255 

Telegraphic  service,  extension  of 255 

Trade  and  commerce 335,  338-339,  341-343 

Trade-marks,   protection  for 254 

Brookline,  Mass.,  delegates  visit  to 502 

Brown,  Franklin  Q. : 
Member  of — 

Committee  on  Transportation 30,71,152 

Permanent  Group  Committee 530 

Reception  Committee 25 

Representative  of  United  States  at  Conference 44,  58 

Brown,  James : 

Member  of  Permanent  Group  Committee 531 

Representative  of  United  States  at  Conference. 44,  63 

Bryan,  William  Jennings 28 

Address 89-91 

Appreciation  of 258,  264,  265 

Discusses  results  of  Conference 294-295 

Joint  reception  to  members 76 

Letter  of  invitation,  transmits 23-24 

Luncheon  to  delegates 77,  78 

Proposed  treaty  between  United  States  and  Nicaragua,  remarks  on—  263-264 

Remarks  at  conclusion  of  Conference 294-295 

Response  to  toasts 471-473 

Welcome  by 75 

Work  acclaimed  by  Latin  America 106 

Buenos  Aires,  meeting  of  International  High  Commission  to  be  held  in_  17 

Buffalo,  N.  Y.,  delegates'  visit  to 500 


INDEX.  707 


Bureau  of  information  _____________________________________________  72 

Bureau  of  Printing  and  Engraving  __________________________________  28 

Bureau  of  standards,  Brazil  recommends  establishment  of  ____________  254 

Burke,  Hon.  John,  representative  of  United  States  at  Conference  ______  44,  67 

Burleson,  Hon.  Albert  S.  : 

Address  ___________  _  ---------------------------------  ____  29,  76,  119-122 

Money-order  service  ________________________________________  121 

Parcel  Post  System  ________________________________________  120-121 

Postal  rates  _______________________________________________  119 

Representative  of  United  States  at  Conference  ___________________  44 

Burrage,  Commander  Guy  H.,  welcome  to  delegates  __________________  494 

Busch,  August,  delegates  visit  home  ________________________________  497 

Bustillos,  V.  Marquez.     See  Marquez. 
Butterworth,  William: 

Member  of  permanent  group  committee  __________________________  532 

Representative  of  United  States  at  Conference  ___________________  44,  68 

C. 

Cabezas,  Senor  Dr.  Augustin,  honorary  president  of  Conference  ______  39 

Cable  correspondence  between  United  States  and  Latin  American  coun- 

tries ____________________________________________________________  505-513 

Cable  service,  Uruguay  ________  :  _____________________________________          684 

Cables,  remarks  by  Secretary  Redfleld  on  necessity  for  ---------------          127 

Cabrera,  Manuel  Estrada,  reply  to  President  Wilson's  cable  ___________          510 

Calder6n,  Seiior  Dr.  Ignacio  : 

Address  ___________________________________________________  _  ____       92-93 

Chairman  of  conference  committee  ________________________________  53 

Delegate  from  Bolivia  ______________________  :  _________________  8,24,41,53 

Indorses  invitation  to  financiers  to  visit  Latin  America  __________          236 

Honorary  vice  president  of  Conference  ___________________________  39 

Member  of  Committee  on  Uniformity  of  Laws  _________________  31,  70,  142 

Memorandum,  remarks  relative  to  present  conditions  in  Bolivia  ___          134 
Merchant  Marine,  discussed  by  __________________________________          255 

Railways,  remarks  on  ------------------------------------------          256 

Cancio,  Seiior  Dr.  Leopoldo,  honorary  president  of  Conference  ________  39 

Carbo,  Senor  Dr.  Enrique,  honorary  president  of  Conference  __________  39 

Cardenas,  Dr.  Roman  : 

Annual  report  as  Minister  of  Finance  of  Venezuela  _______________  668-669 

Honorary  president  of  Conference  _______________________________  39 

Cavalcanti,  Senhor  Dr.  Amaro: 

Address  ______________________________________________________      93-96 

Chairman  of  Conference  Committee  _____________________________  54 

Delegate  from  Brazil  ___________________________________  8,12,24,30,41,54 

Member  of  — 

Committee  on  Transportation  _____________________________  30,  71,  279 

Committee  on  Uniformity  of  Laws  ________________________  31,  70,  142 

Remarks  on  results  of  Conference  ________________________  _  ______  256-257 

Honorary  vice  president  of  Conference  ___________________________  39 

Central  America  : 

Commercial  needs  ______________________________________________  29 

Relations  with  United  States  ___________________________________  32 

Trade  development  _____________________________________________  678-680 


708  INDEX. 

Page. 

Central  Commercial  Agency  recommended  by  Bolivian  delegation— 250, 

255-256,  326 

Chamorro,  Gen.  Emiliano,  on  Conditions  in  Nicaragua 433-434 

Chicago,  111.,  delegates  visit  to 497-498 

Chile : 

Ambassador — 

Invited  to  attend  Conference  as  special  guest  of  Secretary  of 

the  Treasury 43,  55 

Appointment  of  high  commission  in 16 

Banking    system 565-567 

Bonded  warehouse,  receipts  as  collateral  security 251 

Credit,  discount,  and  rediscount  facilities 251 

Debt,  summary  of 568-569 

Export  duty  on  nitrates 251 

Group  Conference  report 349-350 

Imports,  principal 573 

Markets,  inter-American,  expansion  of 572-574 

Memorandum  submitted  on  questions  suggested  by  the  Secretary  of 

the  Treasury 559-574 

Merchant  marine 149 

Mineral  resources 563-564 

Monetary  situation 564-565 

Municipal  loans '. 569 

Permanent  Group  Committee 529 

Permanent  Inter  American  Commission 251 

Private  enterprises,  financing  of 571-572 

Public  finance -  250,561-563 

Remarks  relative  to  group  report 257 

Report  summarized -  250-251 

Trade,  effect  of  war  on 562 

Chisholm,  Joseph  L.  B.,  official  stenographer  on  trip 4 504 

Church,  Samuel  Hardin,  remarks 496 

Clapham,  A.  G.,  representative  of  United  States  at  Conference 44,  64 

Clarkson,  Harold,  group  secretary  for  Paraguay 65 

Clausen,  John: 
Member  of — 

Committee  to  visit  South  and  Central  America 527 

Permanent  Group  Committee 530 

Memorandum  submitted -  249,  673-6-SO 

Representative  of  United  States  at  Conference 44,  60 

Colombia : 

Association  recommended  to  raise  money  for  development  of 360 

Banking   -  364-365 

Commerce  through  Panama  Canal 354 

Currency    

Debt,  remarks  by  Dr.  Perez  Triana  on 135 

Description  of 

Economic  situation -  251,  360-362 

Envoy  Extraordinary  and  Minister  Plenipotentiary — 

Invited  to  attend  Conference  as  special  guest  of  Secretary  of 

the  Treasury 43,  56 

Foreign  debt 362 


INDEX.  709 

Columbia — Continued.  Page. 

Group  conference  report 351-369 

Imports  and  exports 368-369 

Mining 356-357 

Monetary    unit 364 

Money  in  circulation 363 

Natural  resources 356 

Permanent  Group  Committee. 529 

Private  enterprises,  financing  of 365-367 

Prospective  business 356 

Remarks  relative  to  group  report 257 

Report    summarized 251 

Stock    raising 357 

Timber   357-358 

Trade,  effect  of  war  on i 353,  360-366 

Transportation , 367-368 

Columbus  Memorial  Library 202 

Commerce : 

Argentina 315-317,  539-543 

Between  United  States  and  Latin  America 203 

Bolivia 250,  321-324.  328,  330 

Brazil 338-339,  341-343 

Central  America 678-680 

Chile 96-97,  562 

Colombia — 

Advantages  through  Panama  Canal 354 

Effect  of  war  on 353,  360-366 

Consideration  by  Dr.  R.  C.  Aldao 134,  148,  255 

Costa  Rica,  effect  of  war  on 373 

Cuba 380-387 

Dominican  Republic 393,  396 

Ecuador 579 

Extensions  to  Latin  American  Republics 208 

Guatemala 415,  417-418 

Honduras : 423^24 

Laws,  uniformity  of,  relating  to 383 

Nicaragua 584 

Panama 591 

Paraguay 441,  442 

Peru 445,  607,  608-610,  614-615 

Salvador 253,  451,  629 

South  America 678-680 

Uruguay 644-645,  639-654 

Venezuela 464,  658-659,  662-666,  671-672 

Commercial  Agency,  Bolivia - 326 

Commercial  Credit.     See  Credit. 

Commercial  education.     See  Education. 

Commercial  entities,  Ecuador 577 

Commercial  laws: 

Bolivia - 323-324 

Cuba 251,383 

Commercial  paper,  impossibility  of  rediscounting 159 


710  INDEX. 

Commercial  treaties:  Page. 

Between  Cuba  and  the  United  States 379-384 

Proposal  of  treaty  between  Nicaragua  and  United  States 260-261, 

263-264,  434 

Salvador 620-621 

Commercial  travelers 126,  301 

Committees : 

Appointments  of  Transportation  and  Uniformity  of  Laws__  148-152, 193,  207 

Committee  on  Establishment  of  an  International  Court,  members 31 

Committee  on  Transportation  and  Communication — 

Reports  of 278-281,  287-288,  307-309 

Members 30,31,  71 

Suggestions  for  creation  of .  143 

Committee  on  Uniformity  of  Laws : 

Members ^ 31,  70, 142-143 

Report 284-287,  301-303 

Suggestion  for  creation  of 118 

Group  Conference — 

Remarks  by  Dr.  Juan  Cueva  Garcia 138 

Remarks  by  Hon.  W.  G.  McAdoo  on 292-293 

Permanent  group  committees,  appointments 519-520,  525,  528-532 

Special  committee  to  visit  South  and  Central  America,  members  of_  527-528 
Conant,  Hon.  Charles  A. : 

Address  on  Exchange  and  Finance 212-216 

Member  of  Committee  on  Uniformity  of  Laws 31,  70, 143,  228 

Representative  of  United  States  at  Conference 44,  58 

Concha,  Jos£  Vicente,  reply  to  President  Wilson's  cable 508-509 

Cone,  Caesar,  representative  of  United  States  at  Conference 44,  54 

Conklin,  Franklin,  representative  of  United  States  at  conference 44,  60 

Coolidge,  J.  Randolph,  representative  of  United  State  at  Conference..      44,  64 
Cooper,   D.   Y.,   member   of   Committee   to   visit    South   and    Central 

America  527 

Cordeira  da  Graga,  Admiral 502 

C6rdova,  Senor  Dr.  Leopoldo : 

Address 103-104 

Delegate  from  Honduras 8,  24,  42,  62 

Honorary  president  of  Conference 39 

Member  of — 

Committee  on  Uniformity  of  Laws 31,  70, 143 

Official  party  on  trip 503 

Remarks  on  results  of  Conference 259-260 

Cornell,  Charles  L.,  representative  of  United  States  at  Conference 69 

Cosio,  Senor  Dr.  Pedro: 

Address 108 

Appreciation  of  efforts  of  the  Secretary  of  the  Treasury 235-236 

Chairman  of  Conference  Committee,  Uruguay . 68 

Delegate  from  Uruguay 8, 12,  25,  30,  42,  68 

Honorary  president  of  Conference 39 

Member  of  Committee  on  Transportation 30,  71, 279 

Remarks  on  Pan  Americanism 266 

Uruguayan  proposal  for  tour  by  North  Americans 235-236 


INDEX.  711 

Costa  Rica :  Page. 

Banking   system 251,374 

Conference   Committee 57 

Credits,  extension  of 251 

Envoy  extraordinary  and  minister  plenipotentiary  of — 

Invited  to  attend  Conference  as  special  guest  of  the  Secretary 

of  the  Treasury 43,57 

Group  conference  report 371-376 

Inter- American   markets 251,  375 

Merchant-marine  facilities 251,  376 

Monetary   situation 251,374 

Permanent  Group  Committee,  appointments 529 

Postal  facilities : 376 

Private  enterprises,  financing  of 251.374-375 

Public  finance 373-374 

Remarks  relative  to  group  report 257 

Report  summarized 251 

Trade,  effect  of  war  on 373 

Transportation  facilities 251,  376 

Coster,  Morris,  member  of  Permanent  Group  Committee 529 

Cramp,  William,  &  Sons  Ship  &  Engine  Building  Co 495 

Crane,  Charles  R.,  representative  of  United  States  at  Conference 45,  64 

Crean,  Thomas  F.,  member  of  Permanent  Group  Committee 531 

Credit : 

Between  United  States  and  Latin  America 209 

Chile,  discount  and  rediscount  facilities 251 

Commercial  credits  under  Federal  reserve  act 118 

Costa  Rica,  extension  of 251 

Cuba 251,382 

Essential  to  development  of  commerce 9,  208 

Extension  of 244 

Interchange  of  financial   information   urged   by   Uruguayan  dele- 
gation   271-272 

Long-time,  remarks  by  Secretary  Redfield  on 124-125 

Refusal  to  merchants  and  farmers 156 

Salvador 253,  619-620 

Short  and  long,  remarks  by  P.  M.  Warburg  on '. 168, 171 

Short-term,  remarks  by  H.  R.  Eldridge  on 221 

Uruguay 253,  456,  689-691 

Venezuela 465,  665 

Crennan,  C.  H.,  group  secretary  for  Cuba 58 

Crosby,  John,  member  of  Permanent  Group  Committee 529 

Cuadra,  Senor  Dr.  Pedro  Rafael : 

Address 104 

Conditions  in  Nicaragua,  explanation  of 433-434 

Delegate  from  Nicaragua 8,  25,  42,  63 

Member  of — 

Committee  on  Uniformity  of  Laws 31,70,143 

Official  party  on  trip 503 

Memorandum  submitted 581-587 

Need  of  an  international  stable  currency 139 

Honorary  vice  president  of  Conference 40 

Cuadra,  Senor  Dr.  M.  Eulogio,  honorary  president  of  Conference 39 


712  INDEX. 

Cuba :  Page. 

Appointment  of  High  Commission  in 16 

Commercial  arbitration 251,  383 

Commercial  credits 251,  382 

Commercial  information 382-383 

Currency 379-380 

Envoy  extraordinary  and  minister  plenipotentiary  of — 

Invited  to  attend  conference  as  special  guest  of  the  Secretary 

of  the  Treasury 43,  58 

Group  conference — 

Committee 58 

Report 377-390 

Memorandum 384-390 

Permanent  Group  Committee 529 

Reciprocity  treaty  with  United  States 251,  379-384 

Remarks  relative  to  group  report 257-258 

Report    summarized 251 

Trade — 

Effect  of  war  on 385-387 

Relations  with  United  States 1' 380-382,384 

Transportation 135,  381 

Uniformity  of  commercial  laws 251,383 

Oueva  Garcia,  Senor  Dr.  Juan: 

Address 102-103 

Chairman  Group  Conference  Committee 60 

Delegate  from  Ecuador 8,24,41,60 

Remarks 138, 150-151 

Honorary  vice  president  of  Conference 40 

Curley,  Hon.  J.  M 502 

Currency : 

Bolivia 327 

Colombia 363 

Cuba 379-380 

Ecuador 577 

Inflation  of 138 

National-bank  notes,  elasticity  of 157-158, 162 

Nicaragua,  need  of  sound  and  stable 138-139 

Peru 614 

Curtiss,  Frederic  R.,  representative  of  United  States  at  Conference 45,  67 

Customs  concessions,  advantage  of 692 

Customs  duties.    See  Tariff. 

D. 

Davidson,   G.  A.,  member  of  committee  to  visit   South   and   Central 

America 527 

Davies,  Hon  Joseph  E.  : 

Address 78, 195-200 

Representative  of  United  States  at  Conference 45,  56 

Davison,  Henry  P.,  member  of  Reception  Committee 25 

Dean,  Charles  Ray,  group  secretary  for  Brazil 54 

Deans,  H.  G.  P.: 

Member  of  Permanent  Group  Committee 532 

Representative  of  United  States  at  Conference 45, 67 


INDEX.  713 

Debts :  Page. 

Bolivia 323 

Chile 568-569 

Colombia 362 

Ecuador 404 

Honduras 425 

Peru 611 

Unified  interior  debt,  Uruguay 652 

Venezuela 467-468,  660-661 

Delano,  Hon.  F.  A.,  representative  of  United  States  at  Conference 45,  52 

De  Lanoy,  William  C.,  representative  of  United  States  at  Conference—      45,  52 
de  Lima,  E.  A. : 

Member  of  Permanent  Group  Committee 532 

Representative  of  United  States  at  Conference . j*     45,  57 

de  Navarro,  Alfonso,  representative  of  United  States  at  Conference 45,  65 

Denby,  Hon.  Edwin 499 

Desvernine  y  Galdos,  Senor  Dr.  Pablo : 

Address ,. 99-101 

Chairman  of  Conference  Committee,  Cuba 58 

Delegate  from  Cuba 8,24,41,58 

Honorary  chairman  of  meeting  at  Philadelphia l 495 

Honorary  vice  president  of  Conference 40 

Member  of  Committee  on  Uniformity  of  Laws 31,  70, 143 

Remarks 135, 139 

Detroit,  Mich.,  delegates'  visit  to 498-499 

Diaz,  Adolfo: 

Administration  praised ^          260 

Reply  to  President  Wilson's  cable 511 

Dollar  acceptance 163 

Dollar    diplomacy 199 

Dollar  exchange 199,  220-222 

Dominican  Republic: 

Agricultural   resources 137 

Banking  situation 252,  394-395 

Conference  committee 59 

Envoy  extraordinary  and  minister  plenipotentiary  of — 

Invited  to  attend  Conference  as  special  guest  of  the  Secretary 

of  the  Treasury 43,59 

Group  conference  report 391-399 

Inter-American  markets 252.  397 

Loans 395 

Merchant-marine   facilities 397-399 

Monetary  situation 394 

Permanent  Group  Committee 529 

Postal  facilities 252,  398-399 

Present  banking  situation 252,  394-395 

Private  enterprises,  financing  of_ 252,395-396 

Public  finance '. 393-394 

Public  improvements,  financing  of 395 

Remarks  relative  to  group  report 258 

Report    summarized 251-252 

Resolution  relative  to  postal  laws 399 

Tobacco,  duty  on 252 


714  INDEX. 

Dominican  Republic — Continued.  Page. 

Trade,  effect  of  war  on 393,  396 

Transportation  facilities 397-399 

Dougan,  Robert,  press  correspondent 504 

Douglas,  William  H.,  representative  of  United  States  at  Conference..-  45,  G6 

Downey,  Hon.  George  E.,  representative  of  United  States  at  Conference-  45 

Dunaway,  J.  A.,  group  secretary  for  Colombia 56 

Dunne,  Hon.  Edward  F 498 

Duval,  G.  L. : 

Member  of  Permanent  Group  Committee 529 

Representative  of  United  States  at  Conference , 45,  66 

E. 

Earle,  J.  M.,  member  of  Permanent  Group  Committee 529 

Eaton,  Frederick  H. : 

Member  of  Permanent  Group  Committee 530 

Representative  of  United  States  at  Conference 45,  55 

Ecuador : 

Agricultural  resources 150-151 

Appointment  of  High  Commission  in 16 

Banking  and  currency 405-406,  577 

Bills  of  exchange 578 

Bonds,  tables  of 404 

Commercial  entities  and  contracts 577 

Commercial  facilities 579 

Conference   committee 60,  61 

Customs  and  traveling  agents 578 

Debts,  observations  on 404 

Duty  on  samples 411 

Envoy  extraordinary  and  minister  plenipotentiary  of — 

Invited  to  attend  Conference  as  special  guest  of  the  Secretary 

of  the  Treasury 43,60 

General   observations 411 

Group  Conference  report 401-411 

Group  report  summarized . 252,  275-276 

Immigration  and  Mining 579 

Inter-American   markets 409-410 

Memorandum  submitted  by  delegation 575-580 

Merchant-marine  facilities 410-411 

Monetary  situation 404-405 

Natural  resources 102 

Navigation 579 

Permanent  Group  Committee 530 

Postal,  telegraph,  and  telephone  service 578 

Private  enterprises,  financing  of 407-409 

Public  finance 403 

Public  improvements,  financing  of 407 

Remarks  relative  to  group  report 258-259 

Tax  on  salesmen 411 

Trade-marks  and  patents 579 

Transportation  facilities 410-411 

Edson,  John  Joy,  representative  of  United  States  at  conference 45,69 


INDEX.  715 

Education :  Page. 

Guatemala 252 

Uruguay 253,  457,  695-696 

Edwards,  Seiior  Dr  .Alberto,  honorary  president  of  Conference 39 

Eldridge,  Herbert  R. : 

Address 215-224 

Remarks 271-272 

Representative  of  United  States  at  Conference 45,  68 

Elliot,  L.  Elwyn,  article  on  Venezuela 670-671 

Elliott,  Hon.  Milton  C.,  representative  of  United  States  at  Conference.  45,  53 

Emerson,  Guy,  representative  of  United  States  at  Conference 45,  59 

Erskine,  A.  R.,  representative  of  United  States  at  Conference 45,  65 

Esberg,  A.  J.,  representative  of  United  States  at  Conference 45.  58 

Estrada  Cabrera,  Manuel,  reply  to  President  Wilson's  cable _  510 

Exports.     See  Imports  and  exports. 

F. 
Fabey,  Hon.  John  H. : 

Member  of  International  High  Commission 16 

Representative  of  United  States  at  Conference 45,  65 

Resolutions   offered   by . 286-287 

Fairchild,  Samuel  W.,  representative  of  United  States  at  Conference--  45,  66 
Falconer,  Charles  E. : 

Member  of  Permanent  Group  Committee 530,  532 

Representative  of  United  States  at  Conference 45,  59 

Fancher,  E.  R.,  representative  of  United  States  at  Conference 45,  59 

Farquhar,  A.  B.,  representative  of  United  States  at  Conference 45,  58 

Farrell,  James  A. : 
Member  of — 

Committee  to  visit  South  and  Central  America 527 

Permanent  Group  Committee 528 

Reception  Committee 25 

Representative  of  United  States  at  Conference 45 

Federal  Advisory  Council,  duties  of 161 

Federal  Reserve  Act 9-10 

Accomplishments  of,  remarks  of  Hon.  Charles  S.  Hamlin '  159-164 

Changes  brought  about  by 155-164 

Remarks — 

Hon.  Wm.  G.  McAdoo 118 

H.    R.    Eldridge 222,223 

F.    A.    Vanderllp 140-141 

Paul  M.  Warburg 165-178 

Federal  reserve  banks: 

Agencies  in  foreign  countries 8,11 

History  of,  remarks  by  P.  M.  Warburg 168-171 

Management  of 160 

Powers    of 10-11 

Privileged  to  establish  foreign  agencies 118 

Federal  Reserve  Board 8, 10 

Approval  for  establishing  foreign  agencies 118 

Duties  of 160-161 

Power  to  establish  branch  banks  in  foreign  countries 163 


716  INDEX. 

Paee. 
Federal  Trade  Commission 8 

Financial  course  of  American  nations 165-173 

Financial  situation.     See  Public  finance. 

Fisher,  Edmund  D.,  representative  of  United  States  at  conference 45,  62 

Fisher,  E.  J. : 

Address 210-212 

Representative  of  United  States  at  Conference 45,62 

Fletcher,  Duncan  U. : 
Member  of — 

Committee  to  visit  South  and  Central  America 527 

International  High  Commission 16,  527 

Flint,  Charles  R.,  representative  of  United  States  at  Conference 45,  55 

Flood,  Hon.  Henry  D. : 

Address- 231-233 

Representative  of  United  States  at  Conference 45,  52 

Food  and  drugs  laws,  Peru 278,  446 

Ford,  Henry: 

Luncheon  to  delegates 499 

Member  of  Permanent  Group  Committee 528 

Foreign  trade.     See  Commerce. 
Forgan,  James  B. : 

Member  of  Permanent  Group  Committee 529 

Representative  of  United  States  at  Conference 45,  54 

Fortln,  Senor  Dr.  Daniel : 

Delegate  from  Honduras 8,  24,  42 

Member  of  official  party  on  trip .        503 

Franca  y  Alvarez  de  la  Campa,  Senor  Dr.  Porfirio : 

Delegate  from  Cuba 8,  24,  41,  58 

Member  of  official  party  on  trip 503 

Francis,  Hon.  David  R. : 

Address 281-283 

Discussion  on  transportation  report . 288 

Member  of — 

Committee  on  Transportation : 30, 71, 193 

Committee  on  Uniformity  of  Laws 31,  70, 143 

International  High  Commission 16,  527 

Permanent  Group  Committee 530 

Representative  of  United  States  at  Conference , 46,  61 

Requested  to  visit  Guatemala— 420 

Transportation — 

Remarks •_ 281-283 

Resolution  on 283 

Fredrick,  Leopold,  representative  of  United  States  at  Conference 46,  55 

Freight  rates,  Panama  Railroad  Co 253 

Fuerth,  Otto  H.,  representative  of  United  States  at  conference 46,  53 

Fuller,  Paul : 

Member  of — 

Committee  on  Transportation 30,  71, 152 

Permanent  Group  Committee 530 

Representative  of  United  States  at  conference 46, 58 


INDEX.  717 

G. 

Page. 

Gald6s,  Se3or  Dr.  Pablo  Desvernine  y.    See  Desvernine  y  Galdtfs. 
Gallardo,  Senor  Dr.  Enrique : 

Delegate  from  Ecuador . 8,  24,  41,  60 

Member  of  official  party  on  trip 503 

Galliher,  W.  T.,  representative  of  United  States  at  conference 46,  62 

Gama,  Ambassador  Domicio  da : 

Response  to  toast 473^74 

Toast  to  President  of  the  United  States 471 

Tribute  to  Hon.  W.  G.  McAdoo 174 

Garcia,  Esteban  S.,  group  secretary  for  Honduras •  62 

Garcia,  Senor  Dr.  Juan  Cueva.     See  Cueva. 
Garrison,  Hon.  Lindley  M. : 

Remarks. ' 245 

Delegates  to  be  guests  of,  at  special  drill  at  Fort  Myer SO 

Gary,  Hon.  Elbert  H. : 

Member  of  International  High  Commission 16,  527 

Representative  of  United  States  at  Conference 46,  52 

G.athright,  Owen,  member  of  Permanent  Group  Committee 531 

Gautier,  Sefior  Dr.  Salvador,  honorary  president  of  Conference 39 

General  Committee  on  Transportation  and  Communication.     See  Com- 
mittees. 

Gillman,  Horace  M.,  member  of  official  party  on  trip 502 

Gittings,  J.  S.,  Jr. : 

Appreciation  of  services 32,  200 

Assistant  secretary  general 72 

Tribute    from   Assistant    Secretary    of   the    Treasury   Andrew    J. 

Peters 485 

Given,  T.  H. : 

Member  of  Permanent  Group  Committee 532 

Representative  of  United  States  at  Conference 46,  60 

Gladding,  Nelson  A.,  member  of  Permanent  Group  Committee 531 

Godwin,  Earl,  assistant  in  charge  of  press  arrangements  on  trip 504 

Good,  J.  J.,  in  charge  of  baggage  arrangements  on  trip 504 

Goldstein,  L.  S.,  representative  of  United  States  at  Conference 46,  62 

Gomez.     See  Braz  P i 1 508 

Gonzalez,  Alfredo,  reply  to  President  Wilson's  cable 509 

Gonzales,  Senor  Dr.  Vicente: 

Appreciation  of  Secretary  McAdoo's  invitation 496 

Delegate   from   Ecuador 8, 12,  24,  41,  60 

Member  of — 

Committee  on  Transportation 30,  71 

Committee  on  Uniformity  of  Laws 31, 143 

Official  party  on  trip 503 

Remarks 258,  288-289 

Gonzalez-Lamas,  A.,  group  secretary  for  Nicaragua 63 

Goodhue,  F.  A.,  representative  of  United  States  at  Conference 46,  53 

Goodwin,  Elliot  H. : 
Member  of — 

Committee  to  Visit  South  and  Central  America 527 

Permanent  Group  Committee 532 

Representative  of  United  States  at  Conference 46,66 


718  INDEX. 

Page. 

Gorrell,  Frank  E.,  representative  of  United  States  at  Conference 46,  56 

Grace,  Joseph  P. : 

Member  of  Permanent  Group  Committee 528 

Representative  of  United  States  at  Conference 46,  67 

Green,  C.  A.,  representative  of  United  States  at  Conference 46,  55 

Remarks 227-228 

Gregg,  Isaac,  press  correspondent  on  trip 504 

Gregory,  Hon.  Thomas  Watt,  representative  of  United  States  at  Con- 
ference   46 

Grevstad,  Hon.  N.  A.,  representative  of  United  States  at  Conference 46,  68 

Group  Committees.     See  Committees. 

Guaranty  debt.    See  Debts. 

Guardia,  Senor  Dr.  Mariano,  Carazo : 

Chairman  of  Conference  Committee,  Costa  Rica 57 

Delegate  from  Costa  Rica 8,  24,  41,  57 

Honorary  president  of  Conference 39 

Remarks 257 

Guatemala : 

Banking  facilities 253,  416-417 

Commercial  education 252 

Customs    duties 252 

Envoy  extraordinary  and  minister  plenipotentiary  of —  , 

Invited  to  attend  Conference  as  special  guest  of  the  Secretary 

of  the  Treasury 43,61 

Foreign  trade 417^18 

Group  conference  report 413-420 

Imports  and  exports 415 

Monetary  situation 415-417 

Permanent  Group  Committee 530 

Postal    system 252 

Practical  demonstrations  of  industries  recommended 252 

Railways,   ownership  of 417 

Recommendations  to  Conference 419-420 

Remarks  relative  to  group  report 259-260 

Report   summarized _ 252 

Trade,  effect  of  war  on 415 

Transportation    facilities 252-253 

Guthrie,  Ambassador  George  W.,  advocates  friendly  relations 496 


H. 

Ham,  Clifford  D. : 

Conditions  in  Nicaragua,  explanation  of 433-434 

Delegate  from  Nicaragua 8,25,63 

Hamlin,  Hon.  Charles  S. : 

Address 29,  76, 152-164 

Changes  brought  about  by  Federal  reserve  act 155-164 

Closer  trade  relations  with  foreign  countries 163 

Commercial  paper 159 

Elasticity  of  national-bank  notes 157-158, 162 

Federal  advisory  council,  duties  of 161 


INDEX.  719 

Hamlin,  Hon.  Charles  S.— Continued. 
Address — Continued. 

Federal  Reserve  Board —  Page. 

Duties  of 160-161 

Powers  of 163 

Lack  of  cooperation  between  individual  banks 159 

Management  of  Federal  reserve  banks 160 

National  and  State  banks 156 

Refusal  of  credit  to  merchants  and  farmers 156 

Member  of  Committee  on  Uniformity  of  Laws 33,  70,143, 

Representative  of  United  States  at  Conference 46,  55 

Hammond,  Hon.  John  Hays: 
Member  of — 

Committee  on  Uniformity  of  Laws 31,  70, 143,  207 

Permanent  Group  •  Committee 529 

Representative  of  United  States  at  Conference 46 

Harding,  Hon.  W.  P.  J.,  representative  of  United  States  at  Conference.  46,  65 

H;irdy,  Caldwell,  representative  of  United  States  at  Conference 46,  57 

Harper,  Robert  N.,  representative  of  United  States  at  Conference 46,57 

Harris,  A.  M. : 

Member  of  Permanent  Group  Committee 532 

Representative  of  United  States  at  Conference 46,  62 

Harris,  Hon.  William  J.,  representative  of  United  States  at  Conference-  46,  69 

Harrison,  Fairfax,  member  of  Permanent  Group  Committee 530 

Hart,  Francis  R.,  representative  of  United  States  at  Conference 46,  56 

Hassen,  Hugh,  in  charge  of  transportation  on  trip 504 

Hastings,  S.  M.  : 

Member  of  committee  to  visit  South  and  Central  America 528 

Representative  of  United  States  at  Conference 46,  53,  207 

Heiul,  Robert  D. : 

In  charge  of  press  arrangements 504 

Tribute  from  Assistant  Secretary  of  the  Treasury  Andrew  J.  Peters.  485 

Henderson,  Mrs.  John  B.,  reception  of  members 80 

Henry,  S.  T.,  member  of  committee  to  visit  South  and  Central  America-  528 
Hepburn,  Barton : 

Address 178-181 

Member  of — 

International  High  Commission 16,527 

Reception  Committee 25 

Representative  of  United  States  at  Conference 46,65 

Herr,  B.  M.,  member  of  Permanent  Group  Committee 530 

Herrera,  Senor  Dr.  Carlos: 

Delegate  from  Guatemala 8,24,41,61 

Higginson,  Senor  Dr.  Eduardo : 

Delegate 8.  25,  30,  42,  66 

Member  of  Committee  on  Transportation 30,  71 

Hollander,  Prof.  Jacob  II. : 

Member  of  Permanent  Group  Committee 530 

Representative  of  United  States  at  Conference 46,59 

Holliday,  John  H.,  representative  of  United  States  at  Conference 46,  53 


720  INDEX. 

Honduras :  Page. 

Banking  situation 275,  424-425 

Conference   committee 62 

Debt,  interior  and  foreign 425 

Envoy  extraordinary  and  minister  plenipotentiary  of — 

Invited  to  attend  Conference  as  special  guest  of  the  Secretary 

of  the  Treasury 43,  62 

Group  conference  report 421-429 

Inter-American  markets 275,  427-428 

Merchant-marine  facilities 428-429 

Monetary    situation 424 

Permanent  group  committee 530 

Present  banking  situation 424-425 

Private  enterprises,  financing  of 426-427 

Public  finance ^ 423-424,  426 

Public  improvements,  financing  of 275,  425^126 

Report    summarized 275-276 

Trade,  effect  of  war  on 275,423-424 

Transportation  facilities 425,  428-429 

Horton,  Klias  Q.,  representative  of  United  States  at  Conference 46,  54 

Howard,  A.  B.,  representative  of  United  States  at  Conference 47,64 

Hurley,  Hon.  Edward  N. : 

Member  of  Committee  on  Transportation 30,  71, 152 

Representative  of  United  States  at  Conference 47,  53 

I. 

Imhoff,  C.  H.,  representative  of  United  States  at  Conference 47,  62 

Immigration    (Ecuador) , 579 

Imports  and  exports : 

Brazil 341-340 

Chile 573 

Colombia 368-369 

Guatemala 415 

Latin  America 678 

Nicaragua 584 

Paraguay 601-602 

Peru 609-610 

San  Francisco 676 

Uruguay 645-648 

Venezuela 464,  664,  672 

Industries  :  Guatemala,  practical  demonstrations  recommended 252 

Ingle,  William,  representative  of  United  States  at  conference 47,63 

Insurance  state  bank  loan,  Uruguay 652-653 

Inter-American  Commission,   Chile 251 

International  commercial  arbitration.     See  Arbitration. 
International  commercial  court : 

Suggestion  that  Committee  on  Uniformity  of  Laws  take  up  ques- 
tion   of 148 

To  be  appointed  by  Committee  on  Uniformity  of  Laws 30-31 

See  also  Committees :  Committee  on  Uniformity  of  Laws. 
International  Committee  of  Commercial  Arbitration.     See  Committees. 


INDEX.  721 

Page. 
International  Court,  Committee  on  Establishment  of.     See  Committees: 

Committee  on  Uniformity  of  Laws. 
International  High  Commission : 

Establishment  urged  by  Secretary  W.  G.  McAdoo ^  31,  291-292,  518-519 

Members — 

Appointment  of 32 

List    of ! 527 

Resolutions  presented  by  Hon.  John  Bassett  Moore  regarding 289-290 

Organization  of 301-302 

International  trade.     Sec  Commerce. 

International  tribunal 198-109 

Itinerary  of  trip 81 

Izquierdo,  Senor  Dr,  Luis  : 

Address 96-98 

Chairman  of  Conference  Committee,  Chile 55 

Delegate  from  Chile 8,24,30,41,55 

Honorary  vice  president  of  Conference 39 

Member  of — 

Committee  on  Transportation 30,  71 

Committee  on  Uniformity  of  Laws -_. 31,70,142 

Official  party  on  trip 503 

J. 

Jaffray,  C.  T.,  representative  of  United  States  at  conference 47 

Jara  Almonte  de,  J.,  group  secretary  for  Argentina 52 

Jay,  Pierre : 

Member  of  Reception  Committee 2."> 

Representative  of  United  States  at  conference 47,61 

Jenks,  Jeremiah  W.,  member  of  Permanent  Group  Committee 531 

Jennings,  Frederick  B.,  member  of  Permanent  Group  Committee 530 

Jimenez,  Seiior  Dr.  Enrique,  delegate  from  Dominican  Republic 8,  24,  41,  59 

Jimenez,  J.  I.,  reply  to  President  Wilson's  cable 509 

Johnson,  Alba  B. : 

Member  of  Permanent  Group  Committee 530 

Representative  of  United  States  at  conference 47,  55 

Johnston,  Archibald,  representative  of  United  States  at  conference 47,  55 

Jones,  Arthur  W 335 

Jones,  De  Witt  Clinton,  representative  of  United  States  at  conference--  47,  62 

Jordan,  G.  G.,  representative  of  United  States  at  conference 47,  59 

Joy,  Benjamin,  representative  of  United  States  at  conference 47,  52 

K. 

Keith,  Charles  S.,  representative  of  United  States  at  conference 47,  68 

Keith,  John  M. : 

Address 99 

Delegate  from  Costa  Rica 8,  24,  41,  57 

Member  of  Committee  on  Uniformity  of  Laws 31,  70, 142 

Keith,  Minor  C.,  member  of  Permanent  Group  Committee 529 

Kelleher,   Daniel,   member   of   committee  to   visit   South   and   Central 
America • 528 

98257°— 15 46 


722  INDEX. 

•     Page. 

Kelly,  N.  B.,  representative  of  United  States  at  conference 47,  57 

Kent,  F.  I.: 

Member  of  Permanent  Group  Committee ~_  530 

Representative  of  United  States  at  conference 47,  60 

Kies,  William  S. : 

Address 243-245 

Member  of — 

Committee  to  visit  South  and  Central  America 528 

Permanent  Group  Committee 532 

Representative  of  United  States  at  Conference 47,  54 

Kiler,  Charles  A.,  representative  of  United  States  at  Conference 47,  57 

Kinley,  David,  member  of  Permanent  Group  Committee 529 

Kretz,  George  H.,  representative  of  United  States  at  Conference 47,  66 

L. 

Lafayette,  General,  letter  to  Bolivar , 667 

Lage,  Frederico: 

Member  of  Permanent  Group  Committee 529 

Representative  of  United  States  at  Conference 47,  54 

Lara,  Senior  Dr.  Juan  S. : 

Delegate  from  Guatemala 8,  24,  41, 61 

Member  of — 

Committee  on  Uniformity  of  Laws 31,  70, 143 

Official  party  on  trip 503 

Latin  America : 

Commerce 203 

Development  of 9 

Financiers  invited  to  visit 236 

Import   duties 678 

Publicity — 203 

Securities,  listing  of 258 

Steamship  facilities 13 

Importance  of  having  uniformity 15-16, 139 

See  also  Committees,  Committee  on  Uniformity  of  Laws. 

Lee,  Hon.  Blair,  speech  to  delegates 491 

Le  Gendre,  William  C. : 

Address 243 

Amendment  offered  to  Francis  resolution 283 

Representative  of  United  States  at  Conference 47,  68 

Libby,  McNeil  &  Libby 498 

Lipe,  W.  H.,  member  of  Permanent  Group  Committee 530 

Llopis,   Senor  Don  Gabriel: 

Member  of  official  party  on  trip 50I> 

Secretary  to  Colombian  delegation 56 

Loans  r 

Argentina 554-Hr,fi 

Bolivia :;2s 

Chile r.GO 

Dominican  Republic .'{jr. 

Foreign,  remarks  by  Paul  M.  Warburg,  on 172 

Peru  __  44  r> 


INDEX.  723 

Loans — Continued.  Page. 

Remarks  by  Mortimer  L.   Schiff 185,186.388 

Salvador 622 

Uruguay 652-653 

Loeb,  William,  jr. : 

Member  of  Permanent  Group  Committee 532 

Representative  of  United  States  at  Conference 47,  58 

Lowell,  J.  Lawrence 502 

Luco.     See  Barros , 508 

Lufkiu,    E.    C 449 

Luitweiler,  J.  C-,  Group  secretary  for  Bolivia 53 

Luna,  Senor  Dr.  Samuel,  honorary  president  of  Conference 39 

Lurrnan,  Theo.  G.,  jr.,  Group  secretary  for  Costa  Rica 57 

Lyerly,  Charles  A.,  representative  of  United  States  at  Conference 47,  69 

M. 

McAdoo,  Hon.  William  Gibbs,  Secretary  of  the  Treasury 208,  527 

Addresses 27-28,  76, 113-119 

Announcements 76, 132-133, 141-142, 189, 194,  227,  233,  245,  249-250 

Appoints  committee  to  receive  delegates 25 

Argentina  anniversary,  remarks  on 147-148 

Asks  delegates  to  name  members  for  Committee  on  Transportation-  149-150 

Authority  to  invite  bankers  of  United  States 8 

Banquet   to   delegates 80,  469-489 

Commercial  credits : 118 

Conclusion  of  Conference,  remarks  at 288-294 

Congratulated  on  success  of  Conference 259 

Consequences  of  European  war 114 

Consideration  of  special  bureau  in  Pan  American  Union 301-302 

Consideration  of  resolution  on  transportation 283-284 

Discussion  of  subjects,  remarks  relative  to 138 

Establishment  of  branch  banks 118 

Favors  an  annual  conference 517-518 

Federal  reserve  act,  remarks  on 118 

General  remarks 134,  136,  138,  139,  151-152,  181,  200,  206,  210,  255 

Greetings  to  delegates 193 

Group  Conference  Committees,  remarks  on 292-293 

Group  reports,  conclusion  of 278 

International  High  Commission 16-17,  291-292 

Introduces  delegates 91-109 

Introduction  of  President  Woodrow  Wilson 87 

Invitations  to   Conference 8 

Letters — 

To  delegates 517-523 

Transmitting  Proceedings  of  the  Conference 5-20 

Luncheon  to  members : 79 

Merchant  Marine — 

Improvement  advocated 520-522 

Reply   relative  to _ 14i 

Opening   remarks 9-20 

Panama  Canal  to  establish  new  trade  interests 118 

Permanent  Group  Committees  advisable 519-520 

Plan  to  divide  Conference  into  groups 115 


724  INDEX. 

McAdoo,  Hon.  William  Gibbs — Continued.  Page. 

Postal  facilities,  improvement  advocated 523 

Presides  at  opening  of  Conference 9,  75 

Questions  suggested  by 25-26,  35-48, 116-117 

Reception  to  delegates,  announcement 76,  249 

Recommended  that  a  permanent  Committee  on  Transportation  be 

appointed 11-12 

Requested  to  use  influence  in  establishing  new  steamship  lines  and 

American  banks. 410 

Significance  of  Pan  American  Conference 113 

Suggestion  that  Committee  on  Uniformity  of  Laws  take  up  question 

of  international  commercial  court 14S 

Summary  of  suggestions  for  carrying  on  work  of  Conference 19 

Tribute  to — 

Hon.  John  Barrett 490 

Hon.  Andrew  J.  Peters 484 

Dr.   Leo   S.   Rowe 484 

Toasts  to  Presidents  of  South  and  Central  America 471 

Transportation  report,  discussion 288 

Tribute  from — 

Ambassador  da  Gama 474 

Hon.  Dudley  Field  Malone 488 

Hon.  Andrew  J.  Peters 484 

Dr.  Leo  S.  Rowe 486 

Urges  establishment  of  International  High  Commission  on  Uniform 

Legislation 518-510 

Uruguayan  proposal,  remarks  on 236 

McChord,  Joseph  A.,  representative  of  United  States  at  Conference 47.  GO 

McCormick,  Cyrus,  member  of  Permanent  Group  Committee 528 

McCrosky,  Jas.  Warren,  representative  of  United  States  at  Conference.  47,  62 
McGuire,  Constantine  E. : 

Assistant  to  the  Secretary  General  of  International  High  Commis- 
sion  _ 16,  527 

Group  secretary  for  Salvador 67 

McKeesport,  Pa 496 

McQueen,  H.  C. : 

Member  of  Sub-Committee  on  Commerce 449 

Representative  of  United  States  at  Conference 47,  67 

Maddox,  Robert  F. : 

Member  of  Permanent  Group  Committee 531 

Representative  of  United  States  at  Conference 47,  65 

Mahana,  George  S.,  member  of  Permanent  Group  Committee 532 

Major,  Elliott  W.,  welcome  to  delegates 497 

Malburn,  Hon.  Wm.  P.,  representative  of  United  States  at  Conference—  47,  61 
Malone,  Hon.  Dudley  Field: 

Chairman  of  Reception  Committee 25 

Speech  to  delegates  at  banquet 488-400 

Manning,  W.  E.,  member  of  Permanent  Group  Committee ,  531 

Marble,  William  A.,  member  of  Reception  Committee 25 

Markets,  Inter- American : 

Address  of  Dr.  Suay  on 2()S 

Basis  of  reciprocity  advocated  by  Uruguay  delegation 266 

Extension  of _  572-574 


INDEX.  725 

Markets,  Inter-American — Continued.  Page. 

Costa  Rica 251,  375 

Dominican  Republic 252,  397 

Ecuador 409-^10 

Honduras 275,  427-428 

Salvador 633-G34 

Uruguay 692-694 

Venezuela 278,  465 

Marshall,  W.  H.,  member  of  Permanent  Group  Committee 530 

Martin,  William  McC.,  representative  of  United  -States  at  Conference 47,  65 

Martinez  de  Alva,  Seuor  Salvador. 

Group  secretary  for  Chile 55 

Secretary  interpreter  on  trip 504 

Meat  products,  Uruguay 646 

Meeker,  Arthur,  representative  of  United  States  at  Conference 48,  66 

Melgndez,  Carlos,  reply  to  President  Wilson's  cable 512-513 

Memoranda  : 

Submitted  by  delegations — 

Chile 559-574 

Ecuador  575-580 

Panama   , 589-592 

Paraguay 593-603 

Peru   . 605-616 

Salvador 617-634 

Uruguay 635-654,  681-699 

Venezuela 655-672 

Submitted  by — 

Dr.  R.  C.  Aldao 535-550 

Dr.  S.  H.  Pearson 551-557 

Dr.  P.  R.  Cuadra 581-587 

John  Clausen 673-680 

Menocal,  Mario  G.,  reply  to  President  Wilson's  cable 509 

Merchant  marine : 

Bids  suggested  in  reports 12 

Bolivia 323 

Costa   Rica 251,  376 

Cuba,  good  facilities 135 

Dominican  Republic 397-399 

Ecuador 410-411 

Establishment  necessary 9, 12, 13-14, 122,  209,  210,  255,  262-263 

Fast  service  desirable 149,  316-317,  543,  550 

Foreign  registry : •       243 

Government-owned  ships,  remarks  by  R.  W.  Babson 240 

Honduras 428-429 

Improvement  recommended — 

Hon.  Wm.  G.  McAdoo 520-522 

Dr.  S.  H.  Pearson 143-144 

Hon.  Win.  C.  Redfield 127-128 

Dr.  Gabriel  Terra 150 

Panama   253,  438 

Paraguay 442 

Salvador 451 

Seaman's  bill,  effect  of 677 

Service  to  and  from  San  Fraucisco__  677 


726  INDEX. 

Merchant  marine — Continued.  Page. 

Subsidies,  remarks  by  R.  W.  Babson 239 

Transportation  rates  in  Ecuador . 150-151 

United  Fruit  Company's  lines,  extension  of 140 

Uruguay 455,  681-683 

Venezuela '. 278,  463-164,  666 

Meredith,  B.  T.,  representative  of  United  States  at  Conference 48,  56 

Mexico 23 

Miles,  Basil: 

Appreciation  of  services : 32,  200 

Assistant  Secretary  General  of  the  Conference 72 

Tribute  from  Assistant  Secretary  of  the  Treasury  Andrew  J.  Peters.          485 

Miller,  Hon.  Adolph  C.,  representative  of  United  States  at  Conference..      48,  58 

Miller,  J.  Z.,  jr.,  representative  of  United  States  at  Conference 48,  64 

Mills,  A.  L.,  Member  of  Committee  to  visit  South  and  Central  America.          528 

Mineral  resources: 

Bolivia 250,  321-322,  329 

Chile 563-564 

Colombia  356-357 

Ecuador 579 

Paraguay ^ 598-599 

Minotto,  James,  representative  of  United  States  at  Conference 48,  61 

Mitchell,  C.  D. : 

Member  of  Permanent  Group  Committee 532 

Representative  of  United  States  at  Conference 48,66 

Money-order  service,  remarks  of  Postmaster  General  Burleson  on 121 

Money-order  system,  Cuba,  remarks  of  Dr.  Desvernine  y  Galdos  on 135 

Monetary  situation: 

Bolivia 250,324-325 

Chile '. 251,  564-565 

Costa  Rica 251,374 

Dominican  Republic 393-394 

Ecuador 404-405 

Guatemala 415-417 

Honduras 424 

Paraguay 441 

Salvador 630-631 

Monetary  System: 

Uniformity  in  standard,  remarks  of  C.  A.  Conaut 214-215 

Salvador 621-622 

Venezuela  659-660 

Monetary  unit: 

Adoption    suggested 209 

Colombia 364 

Uruguay 455,684-687 

Montes,  Ismael,  reply  to  President  Wilson's  cable 507-508 

Moore,  Charles  G.,  member  of  committee  to  visit  South  and  Central 

America , 528 

Moore,  Hon.  John  Bassett : 

Group   reports   summarized 30,  250-256,  275-276,  277-278 

Member  of — 

Committee  on  Uniformity  of  Laws 31,  70, 143 

International  High  Commission 16 

Remarks  relative  to  committee  report—  237 


INDEX.  727 

Moore,  Hon.  John  Bassett — Continued.  Patr 

Representative  of  United  States  at  Conference 48,  ~rf 

Resolutions  offered  by 289-290,  303 

Response  to  toast  on  behalf  of  United  States  representatives 478-484 

Vice  chairman  of  International  High  Commission-., 527 

Morgan,    J.    Pierpont,    representative    of    the    United    States    at    Con- 
ference   48. 54 

Morgan,  William  F.,  member  of  Reception  Committee 25 

Morris  &  Co 498 

Morron,  John  R.,  member  of  Permanent  Group  Committee 531 

Muchnic,  Charles: 

Member  of  Permanent  Group  Committee 531 

Representative  of  United  States  at  Conference 48,58 

Mulford,  H.  K.,  member  of  Permanent  Group  Committee 531 

N. 

Na6n,  Ambassador  Romulo  S.,  reception  to  delegates " 77 

National  Association  of  Manufacturers,  telegram  from 194 

National-bank  notes : 

Elasticity  of 157-158, 162 

Right  to  issue 155 

National  debt.     See  Debts. 

National  Salt  Co.  (Peru) 610 

Natural  resources: 

Bolivia 250,321 

Brazil 338 

Colombia 1 356 

Ecuador 102 

Nicaragua 253.  200 -201 .  433-434 

Paraguay  106.  441 

Navigation: 

Bolivia 323 

Ecuador 579 

Navy,  United  States,  naval  auxiliaries  for 14-15 

New  Orleans,  La.,  advantages  received  from  Conference 262 

New  York  City : 

Board  of  estimate  and  apportionment,  resolution 183-184 

Financial  policy 183-184 

News  service,  need  for  betterment  of 126 

Newton,  Hon.  Byron  R.,  representative  of  United  States  at  Conference,  48.  57 

Niagara  Falls,  delegates'  visit  to 499-500 

Niagara  Falls,  Chamber  of  Commerce,  luncheon  to  delegates 500 

Nicaragua : 

Agricultural  resources 5S4 

Banks : 583 

Conference  committee 63 

Group    Conference    report 431-434 

Economic  situation 583.  584 

Envoy  Extraordinary  and  Minister  Plenipotentiary  of — 

Invited  to  attend  Conference  as  special  guest  of  the  Secretary 

of  the  Treasury 43,  63 

Explanation  of  conditions  in 433-434 

Exports 584 


728  INDEX. 

Nicaragua — Continued.  Page. 

Financial  problems 253,  587 

Inflated    currency 138-139 

Natural  resources 253,  260-261,  433-434 

Permanent  Group  Committee 530 

Proposed  treaty  with  United  States,  advantages  of 260-261 

Public  finances 586 

Remarks  relative  to  group  report 280-263 

Report  summarized 253 

Stock  raising. 433 

Trade,  effect  of  war  on 584 

Transportation  facilities 434,  585 

Treaty  with  United  States  proposed 253,  434 

Xickerson,  J.  F.,  representative  of  United  States  at  Conference 48,  67 

Nitrates,  Chile,  export  duty  on 251 

Norris,  George  W. : 
Member  of — 

Committee  on  Transportation 30,  71, 152 

Permanent  Group  Committee 529 

Representative  of  United  States  at  Conference 48,  64 

Norton,  Charles  D.,  representative  of  United  States  at  Conference 48.  55 

Nuuisen,  George  H. : 
Member  of — 

Committee  on  Uniformity  of  Laws 31,  70, 143 

Permanent  Group  Committee 531 

Representative  of  United  States  at  Conference 48,  63 

O. 

O'Brien,  Hon.  Edward  C.,  representative  of  United  States  at  Conference.  48,  68 
Ocana.     See  Sanchez. 
Olcott,  Hon.  J.  Van  Vechten : 

Address. 240-241 

Representative  of  United  States  at  Conference 48,  65 

O'Neil,  J.  F. : 

Member  Permanent  Group  Committee 528 

Representative  of  United  States  at  Conference 48,  53 

O'Neil,  Joseph  H.,  member  Permanent  Group  Committee 530 

Osborn,  William  H.,  representative  of  United  States  at  Conference 48 

Osborne,  Hon.  John  E.,  representative  of  United  States  at  Conference 48 

Outerbridge,  E.  H.,  member  of  Reception  Committee 25 

Owens,  Dr.  Clarence  J.,  representative  of  United  States  at  Conference—  48,  69 

P. 

Paine,  A.  Y.,  jr.,  representative  of  United  States  at  Conference 48 

Pan  American  Consular  Association,  luncheon  to  delegates 408 

Pun  American  Finance  Commission,  plan  of  E.  J.  Fisher 210-212 

Pan  American  Financial  Conference: 

Address  by  Hon.  John  Barrett 204 

Annual  meeting  favored  by  Secretary  William  G.  McAdoo 517-518 

Appreciation  by — 

Dr.  Amaro  Cavalcanti 250-257 

Dr.  Desvernine  y  G.-iM6s 257-258 

Dr.  Hector  Velfizquez 270-277 


INDEX.  729 

Pan  American  Financial  Conference — Continued.  Page 

Appropriation  for 7, 18, 19 

Honorary    presidents 39 

Honorary  vice  presidents 39-40 

List  of  delegates 8,  24-25 

Members  of  diplomatic  corps  invited  to  attend 43 

Official  delegations 41^2 

Presiding    officer 39 

Program 35-48 

Representatives  of  United  States  in  attendance 44-55 

Success  of  group  committees 519 

Successful  results  discussed  by — 

Dr.  Isaac  Alzamora 264-265 

Dr.  Roberto  Ancfzar 257 

H.    R.    Eldridge 271-272 

Dr.  Sanchez  Ocaua 259 

Trip  of  delegates 491-504 

Pan  American  States  Association 240-241 

Pan  American  trade,  mutual  interest 196-197 

Pan  American  Union : 

Building  placed  at  disposal  of  Conference 32,  490 

History 201-203 

Pan  Americanism : 

Discussion  by  Dr.  Pedro  Cosio  of 266 

High  ideals  expressed  by  Dr.  Pedro  Rafael  Rincones 272-273 

Panama: 

Appointment  of  High  Commission  in 16 

Banks  and  banking 253,437 

Economic  conditions  discussed  by  Dr.  Aristides  Arjona 264 

Envoy  Extraordinary  and  Minister  Plenipotentiary  of — 

Invited  to  attend  Conference  as  special  guest  of  the  Secretary 

of  the  Treasury 43,  64 

Group  Conference  Committee 64 

Report 435-438 

Remarks  relative  to  group  report .__  264 

Report  summarized 253 

Memorandum  submitted  by  delegation  from 589-592 

Permanent  Group  Committee 530 

Railroad  rates  in 253,437 

Shipping  facilities 253,  438 

Trade,  effect  of  war  on 591 

Transportation 253,  437-138 

Panama  Canal : 

Commercial  advantages  to  Colombia 354 

Commercial  relations  to  be  expanded  through 97 

Effect  on  port  of  San  Francisco 675 

Exemption  of  tolls *. 209 

Transportation  between  Panama  and  Colon 253 

Panama  Railroad  Co.,  freight  rates 253 

Paraguay : 

Agricultural  resources 597 

Arbitration  for  commercial  disputes 276 

Banking  facilities 276.  441,  600-601 

Conference  Committee 65 


730  INDEX. 

Paraguay — Continued.  Page. 

Economic  and  financial  condition 595-603 

Envoy  Extraordinary  and  Minister  Plenipotentiary  of — 

Invited  to  attend  Conference  as  special  guest  of  the  Secretary 

of  the  Treasury 43,  65 

Financial  situation 603 

Group  conference  report 439-442 

Imports  and  exports 601-602 

Memorandum  submitted  by  delegation 593-603 

Merchant-marine  facilities 442 

Mineral  resources 598-599 

Monetary  situation* 441 

Natural  resources 106,  441 

Permanent  Group  Committee .          531 

Remarks  relative  to  group  report 264 

Report    summarized 276 

Trade — 

Conditions   in 442 

Effect  of  war  on 441 

Transportation    facilities 442 

Parcel  post: 

Brazil . 255 

Cuba 135.  251,  381,  623 

Remarks  by  Postmaster  General  Burleson  on 120-121 

Parke,  Davis  &  Co 499 

Parker,  J.  Brooks  B. : 

Appreciation  of  services 32,  200 

Assistant  secretary  general  of  the  Conference 72 

Assistant  secretary  general  of  International  High  Commission 16,  527 

Tribute  from  Assistant  Secretary  of  the  Treasury  Andrew  J.  Peters_          485 

Parker,  Walter: 
Member  of — 

Committee  to  visit  South  and  Central  America 528 

Permanent  Group  Committee 529 

Representative  of  United  States  at  Conference 48,63 

Parry,  Hon.  William  H.,  representative  of  United  States  at  Conference-       48,  60 

Patchin,  Robert  H. : 
Member  of — 

Committee  to  visit  South  and  Central  America 528 

Permanent  Group  Committee 531 

Representative  of  United  States  at  Conference 48,  65 

Pearson,  Sefior  Dr.  Samuel  Hale : 

Address 91-92 

Chairman  of  Conference  Committee,  Argentina 52 

Delegate  from  Argentina 8,  24,  30,  41,  52 

History  of  Argentine  banks 555-557 

Honorary  vice  president  of  Conference 39 

Loans  made  to  Argentina 554  .r,.v> 

Member  of — 

Committee  on  Transportation 30,  71 

Committee  on  Uniformity  of  Laws 31,70,142 

Finances  of  Argentina,  memorandum  on 133-134,  553-557 


INDEX.  731 

Pearson,  Sefior  Dr.  Samuel  Hale — Continued.  Page. 

Merchant  marine,  improvement  of , 143-144 

Report  submitted 301-302.  308-309,313-318 

Steamship  lines,  discussion  relative  to  extension  of 148-149 

Transportation,  remarks  on 13,  30,  278-279 

Pena,  Sefior  Dr.  Carlos  Maria  de: 

Delegate  from  Uruguay 8,  25,  30,  42,  68 

Member  of — 

Committee  on  Transportation 30,  71 

Committee  on  Uniformity  of  Laws 31,  70, 143 

Penfield,  Walter  S. : 

Group  secretary  for  Panama 64 

Representative  of  United  States  at  Conference 48,  64 

Penny,  David  H.  G. : 

Member  of  Permanent  Group  Committee 530 

Representative  of  United  States  at  Conference 48,  59 

Pepper,  Charles  M. : 

Member  of  Permanent  Group  Committee 528 

Representative  of  United  States  at  Conference 48,  59 

Perez  Triana,  Sefior  Dr.  Santiago: 

Address 98-99, 173-178 

Chairman  of  Conference  Committee,  Colombia 56 

Colombian  debt,  remarks  on 135 

Delegate  from  Colombia 8,24,41,56 

Highest  ideals  of  Pan  Americanism 207,210 

Honorary  vice  president  of  Conference 39 

Member  of — 

Committee  on  Uniformity  of  Laws 31,  70, 142 

Official  party  on  trip 503 

Replies  to  toasts 474,  475-478,  495,  498,  502 

Permanent  Group  Committees.     See  Committees. 

Perry,  Marsden  J.,  representative  of  United  States  at  Conference 49,  61 

Peru: 

American  banks,   establishment  of 277 

Appointment  of  High  Commission  in 16 

Banks  and  banking 265,  445,  611-613 

Conference   committee 66 

Currency 614 

Envoy  Extraordinary  and  Minister  Plenipotentiary — 

Invited  to  attend  Conference  as  special  guest  of  the  Secretary 

of  the  Treasury 43,66 

Extension  of  local  banking  facilities  advocated 265 

Finances  and  Commerce 607-610 

Foreign  commerce _, 445,  614-615 

Group  conference  report 443-^46 

Imports  and  exports 609-610 

International  Commercial  Arbitration  indorsed 446 

Loans 445 

Memorandum  submitted  by  the  delegation  from 605-616 

National  debt 611 

National  Salt  Co 610 

National  tax 610 

Permanent  Group  Committee—  531 


732  INDEX. 

Peru — Continued.  Page. 

Present  situation  in . 277 

Pure  food  and  drug  laws 278,  446 

Remarks  relative  to  group  report 264-205 

Report    summarized 277-278 

Trade,  effect  of  war  on 607 

Transportation — 

Facilities 446 

Improvement  necessary 277 

Peruvian   Steamship  Co 150 

Peters,   Hon.  Andrew   J. : 

Appreciation  of  services 32,  200 

Breakfast  tendered  by 80 

Honorary  vice  president  of  Conference 39 

Presented  with  gold  clock 502 

Representative  of  United  States  at  Conference 49 

Speeches — 

At   banquet 484-486 

On  trip 498,  502 

Tribute  from  L.  S.  Rowe  to 487 

Tribute   paid   to — 

L.  S.  Rowe 485 

Wm.  F.  Sands 485 

Basil  Miles 485 

J.  S.  Gittings,  jr 485 

J.  Brooks  B.  Parker 485 

Trip  with  delegates 491-505 

Peynado,   Seiior  Dr.  Francisco  J. : 

Address 101 

Appreciation  of  Conference 258 

Chairman  of  Conference  Committee,  Dominican  Republic 59 

Delegate  from  Dominican  Republic ; 8,  24.  41,  59 

Educational   campaign   needed 136-137 

European  war  will  result  in  increase  of  inter-American  commerce 136 

Honorary  vice  president  of  Conference 40 

Member  of — 

Committee  on  Uniformity  of  Laws 31,  70, 143 

Official  party  on  trip 503 

Recommendation  to  appoint  committee  to  study  postal  conditions.-  137 

Philadelphia,  Pa.,  visit  of  delegates.. 494-195 

Phillips,  Hon.  William,  representative  of  United  States  at  Conference—  49 
Pierson,  Lewis  E. : 

Member  of  Permanent  Group  Committee 531 

Representative,  of  United  States  at  Conference 49.  57 

Pitman,  Alfred,  press  correspondent 504 

Pittsburgh,  Pa.,  delegates  visit  to 495-490 

Plaza,  Leonidas,  reply  to  President  Wilson's  cable 510 

IMji/M.  Victoriuo  de  la: 

Cablegram    to 147 

Cablegram  from 193-194 

Reply  to  President  Wilson's  cable 507 

Political  situation,  Bolivia 323 

Porras,  Belisario,  reply  to  President  Wilson's  cable 511-512 


INDEX.  733 

Postal  facilities:  Page. 

Costa  Rica 376 

Cuba  ; 251,  390 

Dominican  Republic 252,  398-399 

Ecuador 578 

Guatemala 252 

Improvement  advocated  by  Secretary  McAcloo 523 

Latin  America 209 

Rates  discussed  by  Secretary  Burleson 119-120 

Uruguay 457,  G91-692 

Venezuela 278,  404 

Postal  laws,  resolution  of  Dominican  Republic 399 

Potter,  W.  C. : 

Member  of  Permanent  Group  Committee * 532 

Representative  of  United  States  at  Conference 49,  56 

Pratt,  Sereno  S.,  member  of  Reception  Committee 25 

Preston,  Hon.  James  H.,  speech  to  delegates 494 

Price,  Theodore  H ,  representative  of  United  States  at  Conference 49,  69 

Private  enterprises,  financing  of: 

Chile^ 571-572 

Colombia 365-367 

Costa  Rica 251,  374-375 

Dominican  Republic 252,  395-396 

Ecuador 407^09 

Honduras 426-427 

Salvador 632-633 

Program 35^iS 

Public  debts.    See  Debts. 

Public  finance : 

Argentina 553-557 

Chile 561-562 

Costa  Rica 373-374 

Dominican  Republic 393-394 

Ecuador 403 

England 166-167 

Honduras 423-424 

Nicaragua 586 

Paraguay 603 

Peru  607-610 

Questions  for  consideration  relative  to 116 

Salvador  — 629-630 

Uruguay 648-651,  687-689 

Public  improvements,  financing  of : 

Bolivia 325-326 

Chile 567-571 

Costa  Rica 374 

Dominican  Republic : 395-396 

Ecuador 407 

Honduras 425-426 

Salvador 632-633 

Venezuela 467 

Public  utilities,  Venezuela—  466 


734  INDEX. 

Q. 

Page 

Questions  suggested  by  Secretary  of  the  Treasury 25-26,  35-48, 116-117 

Quiil6nez,  SeQor  Dr.  Alfonso : 

Address 107-108 

Appreciation  of  honors  shown  to  Salvador '., 265-266 

Chairman  of  Conference  Committee,  Salvador 67 

Delegate  from  Salvador 8,25,42,67 

Member  of  Committee  on  Uniformity  of  Laws 31,  70, 143 

Reply  to  Mayor  Preston 494 

Honorary  vice  president  of  Conference 40 

B. 
Railways : 

Bolivia _• 250,  322-323,  328-329 

Guatemala 417 

Panama 253,  437 

Remarks  on,  by  Dr.  Ignacio  Calderon 256 

Venezuela 467 

Raskob,  John  J. : 

Member  of  Permanent  Group  Committee 529 

Representative  of  United  States  at  Conference 49,  55 

Reciprocity  treaty  between  Cuba  and  the  United  States 251,379,384 

Redfield,  Hon.  William  Cox: 

Address 76, 122-132 

Banking  facilities 130 

Brusque  manners  in  business 125 

Cables,  necessity  for 127 

Extended  credits  (long  time) : 124-125 

Licenses  for  commercial  travelers 126 

Merchant  marine,  need  of  improvement 127-128 

News  service,  need  for  better 126 

Chairman  of  Committee  on  Uniformity  of  Laws 31,  70, 142 

Reed,  William  A.,  member  of  official  party  on  trip 503 

Reports : 

Adopted — 

Transportation  Committee 287-288 

Uniformity  of  Laws  Committee 287 

Committees — 

Transportation 278-279,307 

Uniformity  of  laws 284-286,  301 

Group  Conference  Committee — 

Argentina . 315-318 

Bolivia 321-331 

Brazil 333-346 

Chile 3!' 

Colombia 351-369 

Costa  Rica ' 371-370 

Cuba 370-31X) 

Dominican  Republic 391-399 

Ecuador 401^11 

Guatemala 413-420 

Honduras , 421-429 

Nicaragua  -  ._  431-434 


INDEX.  735 

Reports— Continued. 

Group  Conference  Committee — Continued.  Page. 

Panama 435-438 

Paraguay 439-442 

Peru 443-446 

Remarks  in  connection  with 255-263,  271-273,  276-277 

Reports 311^68 

Salvador 447-451 

Summary 250-255,  273-276,  277-278 

Uruguay 453^59 

Venezuela 463-468 

Revenue : 

Bolivia 330-331 

Honduras 426 

Paraguay 441 

Reynolds,  George  M. : 

Member  of  International  High  Commission 16 

Representative  of  United  States  at  Conference 49,  66 

Speech  to  delegates 498 

Reynolds,  Hon.  James  B.,  representative  of  United  States  at  Confer- 
ence        49,64 

Rhett,  R.  Goodwin : 
Member  of — 

Committee  on  Transportation 30,  71, 152 

Permanent  Group  Committee 531 

Representative  of  United  States  at  Conference 49,  59 

Rhoads,  Charles  J.,  representative  of  United  States  at  Conference 49,  58 

Rice,  E.  W.,  jr. : 

Member  of  Permanent  Group  Committee 529 

Representative  of  United  States  at  Conference 49,54 

Rich,  John  H.,  representative  of  United  States  at  Conference 49,  57 

Richards,  George  H. : 

Member  of  Permanent  Group  Committee 528 

Representative  of  United  States  at  Conference 49,  53 

Richling,  Senor  Jose,  secretary  of  delegation,  Uruguay 68 

Rincones,  Senor  Dr.  Pedro  Rafael : 

Address 109 

Chairman  of  Conference  Committee,  Venezuela 69 

Delegate  from  Venezuela 8,25,42,69 

High  ideals  of  Pan  Americanism 272-273 

Honorary  vice  president  of  Conference 40 

Member  of  Committee  on  Uniformity  of  Laws 31,  70, 143 

Ringe,  H.  Ralph,  group  secretary  for  Venezuela- 69 

Rivera  Rosas,  Luis,  secretary  interpreter  on  trip 504 

Rodriguez,  Genaro  Silva,  group  secretary,  Uruguay 68 

Rojas,  Seiior  Dr.  Casto,  honorary  president  of  Conference 39 

Root,  Hon.  Elihu,  work  acknowledged  by  Latin  America 106 

Rossell,  John  S.,  representative  of  United  States  at  Conference 49,  63 

Rovensky,  J.  E.,  representative  of  United  States  at  Conference 49,  68 

Rowe,  Leo  S. : 

Announcements , ^___    189-190,  206,  227,  234,  271 

Remarks 133, 193, 194,  233-234,  249,  271,  272 

Report , 23-33 

Secretary  General  of  Pan  American  Conference 72,  96 


736  INDEX. 

Rowe,  Leo  S. — Continued.  Page. 

International  High  Commission 16,  527 

Speech  at  banquet 486-488 

Rowe,  W.  S. : 

Member  of  Permanent  Group  Committee 532 

Representative  of  United  States  at  Conference— 49,  67 

Rubber,  important  product  in  Bolivia : 250,322 

Rublee,  Hon.  George,  representative  of  United  States  at  Conference 49,  68 

Ruperti,  J. : 

Member  of  Permanent  Group  Committee 530 

Representative  of  United  States  at  Conference 49,  61 

Ryan,  John  D.,  representative  of  United  States  at  Conference 49,  55 

Sabin,  Charles  H.,  member  of  Permanent  Group  Committee 529 

Sachs,  Samuel : 

Member  of  Permanent  Group  Committee 531 

Representative  of  United  States  at  Conference 49,  69 

S. 

St.  Louis,  Mo.,  delegates  visit 497 

Salesman's  tax.     See  Samples. 

Salt  Mines,  Peru 610 

Salvador: 

Banks  and  banking 253,  449-450,  624,  631-632 

Commerce 253,  451 

Commercial  credit 253,  619-620 

Commercial  treaties- 620-621 

Envoy  Extraordinary  and  Minister  plenipotentiary  of — 

Invited  to  attend  Conference  as  special  guest  of  the  Secretary 

of  the  Treasury 43,  67 

Group  Conference  committee 67 

Group  Conference  report 447-451 

Inter-American  markets 633-634 

Loans 622 

Memoranda  submitted  by  delegation * 617-634 

Merchant  marine 451 

Monetary  system 621-622.  630-631 

Packing 624 

Parcel  post 623- 

Permanent  Group  Committee 531 

Postal   tariffs 622 

Private  enterprises,  financing  of 632-633 

Public  finances 629-G30 

Public  improvements,  financing  of 632-633. 

Recommendations  of  delegation 024 

Remarks  relative  to  group  report 2(Jf»  -26t'> 

Report  summarized 253 

Trade,  effect  of  war  on 52;) 

Transportation  facilities 450-451,  623 

Weights  and  measures 623 

Samples : 

Taxes  on  salesmen  and  samples 242,301 

Cuba 251,  382,  465 

Ecuador 411 

Remarks  of  Dr.  Ignacio  Calderon  on__  255 


INDEX.  737 

Sanchez  OcaSa,  Senor  Dr.  Victor:  Page 

Address 103 

Chairman  of  conference  committee |  61 

Delegate  from  Guatemala 8,24,41,61 

Remarks  on  success  of  Conference 259 

Sands,  William  Franklin : 

Appreciation  of  services 32,  200,  485 

Assistant  secretary  general 72 

Member  of  official  party  on  trip 502 

Tribute    from    Assistant    Secretary    of    the    Treasury   Andrew    J. 

Peters 435 

Saunders,  W.  L. : 
Member  of — 

Committee  on  Uniformity  of  Laws 31,  70, 143 

Permanent  Group  Committee 531 

Representative  of  United  States  at  Conference 49,  59 

Schaerer,  Eduardo,  reply  to  President  Wilson's  cable 512 

Schenectady,  N.  Y.,  delegates  visit 500-501 

Schiff,  Jacob  H.,  member  of  Reception  Committee 25 

Schiff,  Mortimer  L. : 

Address , • 181-189 

Government  finance 183 

International   financing 182 

Loans 185, 186, 188 

Policy  of  New  York  City 183-184 

Securities  ...^ 184-186 

Member  of  Permanent  Group  Committee 529 

Representative  of  United  States  nt  Conference 49,52 

Schmidt,  George  P.,  representative  of  United  States  at  Conference 49,  52 

Schools.     See  Commercial  education. 

Schoonmaker,  S.  L. : 

Member  of  Permanent  Group  Committee 531 

Representative  of  United  States  at  Conference 49,  52 

Scofield,  Kendrick,  press  correspondent  on  trip 504 

Seaman's  bill.     See  Merchant  Marine. 

Secretary   General   Pan  American   Financial   Conference.     See   Rowe, 
Dr.  Leo  S. 

Secretary  of  the  Treasury.     See  McAdoo,  Hon.  William  Gibbs. 

Securities : 

Chile,  bonded  warehouses  as 251 

Ecuador 577 

Listing  of  Latin  American 258 

Remarks  by  Mortimer  L.  Schiff  on 184-186 

Seligman,  Isaac  N. : 

Member  of  Permanent  Group  Committee 

Representative  of  United  States  at  Conference..  50 

Shapleigh,  A.  L.,  representative  of  United  States  at  Conference..  50,  01 

Shaw,    Henry 497 

Shepherd,  W.  R.,  member  of  Permanent  Group  Committee..  529 

Sherrill,  Hon.  Charles  H. : 

Address 

Representative  of  United  States  at  Conference— 

Sherwell,  G.  A.,  group  secretary  for  Dominican  Republic 59 

98257°— 15-47 


738  INDEX, 

Stopping  facilities.     See  Merchant  marine.  Page. 
Shirley,  James  J. : 

Member  of  committee  to  visit  South  and  Central  America 528 

Representative  of  United  States  at  Conference L 50,68 

Silver   market 227 

Simmons,  Wallace  D. : 

Member  of  Permanent  Group  Committee 529 

Representative  of  United  States  at  Conference '50,  56 

Singer,  Bernard 498 

Smith,  Charles  E.  W.,  representative  of  United  States  at  Conference 50,  52 

Smith,  Hon.   William  Alden 499 

Solberg,  Seiior  Juan  A.,  secretary  of  delegation  from  Cuba 58 

Special  Committee  in  Charge  of  Visit  of  American  Financiers,  etc.     See 
Committees. 

Speyer,  James,  representative  of  United  States  at  Conference 50.  53 

Steamship  lines.     See  Merchant  marine. 

Stetson,   John  B 495 

Stock  raising: 

Argentina • 274 

Bolivia 250,322 

Colombia ' 357 

Nicaragua 433 

Uruguay  

Stone,  Hon.  William  J 8 

Storrow,  James  J.,  representative  of  United  States  at  Conference 50,  53 

Straight,  Willard  D. : 
Member  of — 

Committee  on  Uniformity  of  Laws 31,  70, 143 

Committee  to  visit  South  and  Central  America 528 

Permanent  Group  Committee 528 

Reception  Committee 25 

Representative  of  United  States  at  Conference 50,  56 

Strauss  Seiior  Dr.  Albert,  delegate  from  Nicaragua 8,25,42,63 

Strong,  Benjamin : 
Member  of — 

Committee  on  Uniformity  of  Laws___ 31.  70, 148, 193 

Reception  Committee 25 

Representative  of  United  States  at  Conference 50,  62 

Suay,  Sefior  Dr.  Jose  E. : 

Address 207-210 

Delegate  from  Salvador___ 8,  25.  42,  67 

Subsidies.     See  Merchant  marine. 

Snlzberger,  G.  F.,  representative  of  United  States  at  Conference 50,  52 

Sulzberger  &   Sons 498 

Sutter,  Charles  S.,  representative  of  United  States  at  Conference 50,  54 

Swift  &  Co 498 

Swiggett,  Dr.  Glen  L.,  representative  of  United  States  at  Conference 50,  61 

T. 
Tariff : 

Guatemala 252 

Postal 622 

Samples 242 

Uruguay 457 


INDEX.  739 


Taxes:  Page. 

Abolishment  on  navigation,  etc.,  advocated  by  Dr.  Gabriel  Terra 150 

Ecuador 411 

Peru 610 

Uruguay 457,  696-699 

Venezuela   465 

Taylor,  G.  C.,  member  of  Permanent  Group  Committee 530 

Tedcastle,  A.  W.  : 

Address   242 

Representative  of  United  States  at  Conference 50,  60 

Telegraphic  service: 

Argentina 273,  317 

Brazil ,- 255 

Ecuador 578 

Rates  discussed  by  Dr.  Ricardo  C.  Aldao 273 

Uruguay 253,  455 

Telephone  service,  Ecuador 1 578 

Terra,  Senior  Dr.  Gabriel : 

Delegate  from  Uruguay 8,  25,  30,  42,  68 

Member  of  Committee  on  Transportation 30,71 

Urges  improvement  of  merchant  marine 150 

Thayer,  H.  B.,  member  of  Permanent  Group  Committee 531 

Thomas,  E.  P.: 

Member  of  Permanent  Group  Committee 532 

Representative  of  United  States  at  Conference 50,54 

Thompson,  Hon.  Arthur  R. : 

Representative  of  United  States  at  Conference 50,  63 

Thompson,  Hon.  William  H . 497-498 

Timber : 

Bolivia 250,  322 

Colombia  357,  358 

Paraguay „ 

Tobacco : 

Cuban,  duty  on 251 

Dominican  Republic,  duty  on 252 

Toby,  George  P.,  representative  of  United  States  at  Conference 50,  62 

Townley,  Calvert,  representative  of  United  States  at  Conference 50,  68 

Trade.    See  Commerce. 

Trade-marks : 

Brazil  recommends  protection  for 254 

Ecuador 579 

Uruguay 458-459 

Transportation : 

Argentina 315,  316-317 

Bolivia 250,  323 

Colombia . 367-368 

Costa  Rica 251,  376 

Cuba 381 

Ecuador 150-151,  410-411 

Guatemala 252-253 

Honduras 428-429 

Improvement  necessary 277 

Nicaragua 434,  585 


740  INDEX. 

Tra  importation — Continued.  Page. 

Panama 437-438 

Paraguay 442 

Peru 44G 

Remarks  by — 

Dr.  R.  C.  Aldao 273-274 

Hon.  David  R.  Francis 281-283,  288 

Dr.  Samuel  Hale 278-279 

Hon.  Win.  G.  McAdoo 288 

Dr.  Suay . 208-200 

Report  adopted 287-2S.S 

Resolution  by  Hon.  David  R.  Francis  on 283 

Salvador. 450-451,  623 

Transportation  and  Communication,  General  Committee  on.     See  Com- 
mittees. 

Traveling  agents,  Ecuador 578 

Travieso,  Hon.  Martin,  representative  of  United  States  at  Conference--      50,  60 

Treaties.     See  Commercial  treaties. 

Trip  taken  by  delegates,  with  list  of  members 491-505 

U. 

Uniformity  of  commercial  law.    See  Commercial  law. 

Uniformity  of  laws,  report  adopted  on 287 

Uniformity  of  Laws  Committee.    See  Committees. 

United  Fruit  Co - 14!) 

United  States: 

Banking  laws . 261-262 

Reciprocity  treaty  with  Cuba 251,  379-°.84 

Representatives  of 29 

Steamship  facilities .___      13, 14 

Trade  relations  with  Cuba 384 

Treaty  proposed  with  Nicaragua 253,  260-261,  263-264,  434 

Untermyer,  Samuel : 
Member  of — 

Committee  on  Uniformity  of  Laws yi,  70. 143 

International  High  Commission 16,  527 

Representative  of  United  States  at  Conference 50 

Uruguay : 

Banks 253,  456,  643-644,  645 

Cable  service 684 

Commercial  credit 253,  456,  689-691 

Commercial  education 253,  457.  695-696 

Conference  Committee OS 

Economic  measures  as  result  of  war 641-644 

Envoy  Extraordinary  and  Minister  Plenipotentiary  of — 

Invited  to  attend  Conference  as  special  guest  of  the  Secretary 

of  the  Treasury 43,  68 

Exchange  and  arbitration 684-6S7 

Financial  situation tH,S-C51.  687-689 

Foreign    trade 644 

Government    property 653-654 

Group  conference  report 453-459,681-699 

Hides—  _  646-647 


INDEX.  741 

Uruguay — Continued.  Page. 

Imports  and  exports 645-648 

Inter-American   markets 266,  692-694 

Interchange  of  financial  credit  information  urged 271-272 

Maritime  transportation 681-683 

Meat   products 646 

Memoranda  submitted  by  delegation 635-654,  681-699 

Merchant  Marine  facilities 455 

Monetary    Unit 455,  684-687 

Permanent  Group  Committee 531 

Postal  facilities 457,  691-692 

Proposal  for  a  tour  by  North  Americans 235-236 

Public  debt 651-652,  653 

Remarks  relative  to  group  report 266,  271-272 

Report    summarized 253-254 

Tariff    arrangements ' 457 

Taxation,  system  of 457,  696-699 

Telegraphic    service 253,  455 

Topics  suggested  by  delegation 637 

Trade — 

Effect  of  war  on 639-654 

With  United  States 645 

Trade-marks,  protection  of 458^59 

Weights  and  measures,  system  of__ 253,  45»,  683 

Wool 646 

V. 

Van  Antwerp,  William  C.,  member  of  Reception  Committee 25 

Vanderlip,  Frank  A. : 

Branch  banks  and  the  Federal  reserve  act 140-41 

Central  Commercial  Agency  indorsed  by 256 

Member  of  Reception  Committee 25 

Representative  of  United  States  at  Conference 50,  52 

Velazquez,  Seuor  Dr.  Hector: 

Address 105-106 

Remarks  on  results  of  Conference 276-277 

Chairman  of  Conference  Committee,  Paraguay 65 

Delegate  from  Paraguay 8,  25,  42,  65 

Honorary  vice  president  of  Conference 40 

Ve"lez,  Senor  Dr.  Jorge,  honorary  president  of  Conference 39 

Venezuela : 

Banks 659 

Commerce 662-666 

Comparison  of  American  and  European  trade 663-665 

Credits 405,  665 

Economic  conditions 670,  671 

Effect  of  European  War  on 658-659 

Envoy  Extraordinary  and  Minister  Plenipotentiary  of,  invited  to 
attend  Conference  as  special  guest  of  the  Secretary  of  the 

Treasury 43.69 

Exports  from  port  of  New  York 672 

Finances 467-468,  660-661,  668-669 

Foreign   trade 464 


742  INDEX. 

Venezuela — Continued.  Page. 

General  trade  during  fiscal  year  1913-14 670-671 

Group  Conference  Committee 69 

Group  Conference  report : 461-468 

Imports  and  exports 464,  664,  672 

Inter-American   markets 278,  465 

International  Arbitration  Courts 466 

Memorandum  submitted  by  delegation 655-672 

Merchant  marine 278,403-464,666 

Monetary   system 659-660 

Permanent  Group  Committee 531 

Postal  facilities 278,  464 

Public   improvements 467 

Public  utilities 466 

Railroads 467 

Remarks  relative  to  group  report 272-273 

Report  of  minister  of  finance 668-669 

Report  summarized 278 

Trade — 

Effect  of  war  on 658-659 

Statistics   671 

Vergara  Bulnes,  Senor  Dr.  Gonzalo: 

Addresses 495,  502 

•Delegate  from  Chile 8,12,24,30,41,55 

Member  of — 

Committee  on  Transportation . SO,  71 

Official  party  on  trip 503 

Merchant  marine,  remarks  on 12, 149 

Viera,  Feliciauo,  reply  to  President  Wilson's  cable : 513 

Villamil,  Senor  Dr.  V. : 

Delegate  from  Argentina  and  representative  of  the  Buenos  Aires 

Chamber  of  Commerce 8,  24,  30,  41,  52 

Member  of  Committee  on  Transportation 30,  71 

Villanueva,  Seuor  Dr.  Augusto. 

Delegate  from   Chile 8,24,30,41,55 

Member  of—- 
Committee on  Transportation 30,  71 

Official  party  on  trip 503 

Villaran,  Senor  Dr.  Luis  Felipe,  honorary  president 39 

Virginia 494 

Vogel,  Martin,  vice  chairman  of  Welcome  Committee 25 

W. 

Wade,  F.  J.,  representative  of  United  States  at  Conference 50,  64 

Walsh,  Hon.  David  I 502 

War.  European: 

JO  i  feet  on  trade — 

Bolivia 328 

Chile 562 

Colombia 353,  360-366 

Costa  Rica 373 

Cuba..  _  385-387 


INDEX,  743 

War,  European — Continued. 

Effect  on  trade —  Page. 

Dominican  Republic 393,  396 

Guatemala 415 

Honduras 275,423^24 

Nicaragua 584 

Panama 591 

Paraguay 441 

Peru GOT 

Salvador H29 

Uruguay 639-654 

Venezuela 658-659 

Effects  on  finance 165 

Result  will  be  to  increase  inter-American  commerce 136 

Warburg,  Hon.  Paul  M.  : 

Address 76, 165-173 

Federal  reserve  banks,  history  of 168-171 

Financial  dependence  not  to  be  placed  on  single  nation 168 

Financial  independence  of  United  States 173 

Financial  situation  in  England 166-167 

Financial  structure  of  a  country 171 

Foreign  loans 172 

Future  financial  course  of  American  nations 165 

Member  of  subcommittee  on  banking 335 

Short  and  long  credit 168, 171 

Representative  of  United   States  at  Conference 50,  54 

Ward,  Cabot,  member  of  Reception  Committee 25 

Warden,  Charles  W.,  representative  of  United  States  at  Conference—      50,  61 
Warfield,  Hon.  Edwin: 

Member  of  committee  to  visit  South  and  Central  America . 528 

Representative  of  United   States  at  Conference 50,  59 

Warren,  Charles  B.,  representative  of  United  States  at  Conference—  50,  69,  499 

Weeks,  Hon.  John  W 502 

Weights  and  measures: 

Metric    system 209 

Salvador 623 

Uruguay 253,  455,  683 

Wells,  Rolla,  representative  of  United  States  at  Conference 50,64 

Wexler,  Sol: 

Member  of — 

Committee  on  Transportation 30.  71, 193 

Permanent  Group  Committee 531 

Remarks 260-261 

Representative  of  United  States  at  Conference 51.63 

Wheeler,  Harry  A.: 
Member  of — 

Committee   on    Transportation 30,71.152 

Permanent  Group  Committee 532 

Representative  of  United   States  at  Conference 51.  68 

White,  J.  G.: 
Member  of — 

Committee  on  Transportation 30,  71, 152 

Permanent    Group    Committee 530 

Representative  of  United  States  at  Conference 51.  52 


744  INDEX. 

White,  Dr.  William  Wallace:  Page. 

Delegate  from  Paraguay 8,25,42,65  106 

Member  of  Committee  on  Uniformity  of  Laws 31,  70, 143 

Remarks 264 

White  House,  reception  held  for  delegates 249 

Wiggin,  A.  H. : 

Member  of  Reception  Committee 25 

Representative  of  United  States  at  Conference 51.  60 

Wilford,  Senor  W.  R.,  secretary  of  delegation,  Panama 64 

Williams,  Hon.  John  Skelton,  representative  of  United  States  at  Con- 
ference     51 

Williams,  R.  Lancaster: 

Member  of  Permanent  Group  Committee 520 

Representative  of  United  States  at  Conference 51,  69 

Willis,  H.  Parker,  representative  of  United  States  at  Conference 51 

Wilson,  Hon.  William  B.,  representative  of  United  States  at  Conference.  51 

Wilson,  Dr.  William  P. : 

Member  of  Permanent  Group  Committee 

Representative  of  United  States  at  Conference 51,  67 

Wilson,  President  Woodrow : 

Address 75,  87-89 

Cable  correspondence  with  Latin-American  Presidents 505-513 

Reception  to  delegates 76,  249 

Wing,  Daniel  G. : 

Member  of  Permament  Group  Committee 

Representative  of  United  States  at  Conference 51,  54 

Wood.  Edward  Randolph,  representative  of  United  States  at  Conference-  51,  63 

Woodin,  William  E.,  member  of  Permanent  Group  Committee 530 

Woodward,  William,  member  of  Reception  Committee 25 

Woolley,  Hon.  Robert  W. : 

Member  of  Committee  on  Uniformity  of  Laws 31,  70, 143,  207 

Representative  of  United  States  at  Conference 51 

Y. 

Yanes,  Francisco  J.,  representative  of  United  States  at  Conference 51,  69 

Z. 

Zayas  y  Adan,  Senor  Dr.  Octavio: 

Delegate  from  Cuba 8,24,41,58 

Member  of  official  party  on  trip 503 

Zimmerman,  John  E,  representative  of  the  Buenos  Aires  Chamber  of 

Commerce,  member  of  Committee  on  Transportation 30 

Zubizarreta,  Senor  Dr.  Jer6nimo,  honorary  president 39 


